Energy & Power // Transmission and Distribution
The global microgrid controller market is
foreseen to grow by 23.7%, from USD 3.99 Billion in 2022 to USD 21.87 Billion in
2030. Decarbonization being increasingly emphasized by different End-users and
governments, growing need for reliable, uninterrupted power supply, optimization
of energy assets and improved efficiency of microgrids using microgrid
controllers, surge in use of microgrids for rural electrification is to drive
the market for the upcoming forecast period. However, High cost of microgrid
controllers, dynamic government policies, regulations, and standards worldwide remains
one factor hindering the market growth over the anticipated period.
What is Microgrid Controller?
controller is a device that manages and controls a microgrid, which is a
localized energy system that can operate independently or in conjunction with
the main grid. The microgrid controller plays a crucial role in optimizing the
microgrid's performance and ensuring a stable and reliable power supply. This
essay will explore the concept of microgrid controllers and their importance in
the rapidly evolving energy landscape.
One of the primary benefits of a microgrid
controller is its ability to manage and balance multiple energy sources,
including renewable energy sources such as solar and wind power, as well as
traditional sources like diesel generators. The controller can use
sophisticated algorithms to optimize the use of these sources, switching
between them as needed to ensure a stable power supply. This can be
particularly important in remote areas or during emergencies when the main grid
may be down.
In addition to managing multiple energy sources, a microgrid
controller can also monitor and control energy storage systems, such as
batteries or flywheels, to ensure optimal performance. By carefully managing
the storage and use of energy, a microgrid controller can help reduce energy
waste and increase the overall efficiency of the microgrid.
Another key role of the microgrid controller is to monitor
and manage power quality. This involves ensuring that the voltage and frequency
of the power supply are within acceptable limits and that the power supply is
stable and reliable. This is particularly important for critical facilities,
such as hospitals or data centers, that require a high degree of power quality
to operate effectively.
In recent years, the demand for microgrid controllers has
increased significantly as the energy landscape has evolved. With the rise of
renewable energy sources and the increasing focus on energy efficiency and
resilience, microgrids have become an increasingly popular solution for
businesses, communities, and governments. As a result, many companies have
begun to develop and market microgrid controllers that are specifically
designed to meet the needs of this emerging market.
Drivers in Microgrid
Increasing Demand for Reliable and Uninterrupted Power
In recent years, there has been a growing need for reliable
and uninterrupted power supply, driving significant changes in the energy
sector. Traditional power grids, which rely on large, centralized power plants
and extensive transmission networks, have demonstrated limitations in terms of
efficiency and sustainability. These grids heavily depend on fossil fuels for
electricity generation, contributing to pollution and climate change. They are
also susceptible to disruptions caused by natural disasters, leading to network
failures and widespread blackouts.
To address these challenges, there is a rising demand for
alternative solutions such as self-power generating plants or microgrids.
Microgrids are decentralized energy systems that can operate independently,
ensuring a continuous power supply even during grid outages. They provide a
more resilient and sustainable approach to energy distribution, making them
The adoption of microgrids is particularly prominent in the
United States, with a significant number of projects implemented across various
sectors. As per the U.S. Department of Energy, there are over 3,000 microgrid
projects in the country, with a total capacity of more than 26,000 MW. These
projects are primarily focused on enhancing energy resilience and backup power,
along with delivering cost savings and environmental benefits. Similar trends
are observed in Europe, where microgrids are expected to play a crucial role in
transitioning towards a low-carbon economy, especially in regions with a high
share of renewable energy sources.
The Asia Pacific region is also witnessing substantial
growth in the microgrid market. The transmission lines that previously supplied
electricity from remote power plants are being challenged by the need for more
efficient and sustainable energy transmission. The focus is shifting towards
clean energy projects and the adoption of renewable energy sources, leading to
the expansion of modern distributed power generation systems. This, in turn,
drives the demand for microgrids and their associated controllers.
Microgrids offer a reliable and secure power supply system,
ensuring uninterrupted electricity in case of blackouts or power failures.
Their ability to operate autonomously for extended periods makes them highly
valuable. The market for microgrid controllers is expected to witness
significant growth as clean energy projects and renewable energy infrastructure
continue to expand globally.
Microgrid Controller Market
The market for microgrid technology is expected to
experience constraints due to dynamic government policies, regulations, and
standards worldwide. The current framework structure poses challenges to the
acceptance of microgrids, as regulations and policies overseeing their integration
into the wider grid are still under development. For instance, IEEE Standard
1547 requires grid-connected power inverters to shut down on detecting grid
faults, and research is being conducted into standards for the operation of
microgrids. This creates difficulties for manufacturers who must design a
microgrid controller that complies with different standards. In addition, grids
are susceptible to natural disasters, which frequently lead to network
malfunctions or blackouts.
Opportunities in Microgrid
However, increased environmental protection measures have
encouraged businesses to implement effective energy conservation systems, and
the modernization of aging grid infrastructure presents opportunities for the
microgrid controller market. Microgrids can provide a resilient and reliable
solution to the old-aged electricity infrastructure, which is necessary to
achieve high performance and cause fewer outages over a long period. China's
plans to invest USD 6 trillion in infrastructure over the next decade will also
provide significant opportunities for microgrid control system providers like
ABB (Switzerland), Schneider Electric (France), and Siemens (Germany). The
increasing popularity of renewable power sources and cutting-edge distributed
power-generating systems also drive the microgrid control system market.
Microgrid Controller Market
Microgrids are becoming increasingly popular in modern
times, but they come with a set of challenges. One of the most significant
issues faced by microgrid operators is interoperability and compatibility
problems due to the large number of components and devices used. A microgrid
consists of various hardware and software components from different vendors,
which can create compatibility and interoperability issues. Therefore,
interoperability is a crucial aspect that enables technologies from different
vendors to interact seamlessly on a common network.
To achieve effective resource coordination, a common
standard or protocol is vital in supporting automated resource coordination.
However, the complexity of microgrid configuration, which involves the
interface of devices, systems, and people between the microgrid and electric
power system (EPS), poses significant challenges to interoperability.
Interoperability requirements are more extensive when microgrid functions are
considered as connected to and operated as part of the EPS rather than as an
Additionally, when new components are added to a microgrid,
operational methodologies, protocols, secure communications, standards, codes,
and safety requirements must be developed and updated on time to validate the
viability, functionality, consistency, reliability, compatibility, and
interoperability of utility grids with other microgrid systems. Microgrid
control systems must match up with these additions regularly. Therefore, it is
crucial to ensure that these issues are addressed to facilitate efficient
operations and effective management of microgrids.
During the forecast period, grid-connected microgrids are
expected to dominate the microgrid controller market. These microgrids consist
of multiple generators, distribution systems, and advanced controls, offering improved
grid resiliency, enhanced power quality, and reduced environmental impact. The
expansion of utility-based grid networks worldwide, along with the extensive
utilization of renewable energy sources such as offshore wind, is driving the
growth of this segment.
In terms of market share, the hardware segment is
anticipated to hold the largest portion in the microgrid controller market
during the forecast period. Several factors contribute to the growth of this
segment, including the increasing number of microgrid projects globally,
declining costs of energy storage and renewable energy sources, and government
initiatives promoting clean energy adoption and greenhouse gas (GHG) emissions
reduction. Microgrids generate electricity from a variety of sources, including
renewable sources like solar and wind, as well as non-renewable sources such as
fuel cells, diesel generators, combined heat and power (CHP) systems, and
The end-use application of remote areas is expected to
account for the largest share in the microgrid controller market during the
forecast period. This is driven by factors such as growing government support
and the deployment of microgrid projects in remote areas. According to the
International Energy Association, around 1.3 billion people in remote areas
worldwide face electricity scarcity due to high costs of fossil fuels and
challenges in electricity transmission. In response, governments in various
countries are increasing investments in electricity infrastructure to provide
efficient, affordable, and clean electricity to remote communities. This has
led to a heightened demand for microgrids in these areas.
The commercial and industrial segment currently holds the
largest revenue share in the microgrid controller market and is expected to
continue growing in the coming years. This is attributed to the need for
uninterrupted power supply and protection of equipment during industrial
operations. The adoption of microgrid technology enables facilities to operate
autonomously during grid failures, ensuring continuous operations.
Overall, the microgrid controller market is witnessing
significant growth driven by factors such as the expansion of grid-connected
microgrids, the prominence of the hardware segment, and the demand for reliable
power supply in remote areas and commercial/industrial sectors.
For the purpose of this report, the global microgrid
controller market segmented on the basis of connectivity type, offering type, end-use
application, and region:
On the basis of connectivity type, the market
is segmented into grid connected, off-grid.
On the basis of offering type, the market is
segmented into hardware, software, services.
On the basis of end-use application, the
market is segmented into commercial & industrial, remote areas, military,
government, utilities, institutes & campuses, healthcare.
1 Microgrid Controller Market By End-use Application (Market Size And Forecast
By Value - USD Million, 2022 & 2030)