Microgrids are one of the hottest topics in the renewable energy world, and there is increasing interest in strategic partnerships in the microgrid market, according to a report from consultancy THEnergy.
The report says solar and wind energy are changing the paradigms of electricity generation toward more decentralized solutions. The utility microgrid segment is mainly driven by autarky and reasons related to supply security, while solar- or wind-diesel hybrid microgrids are mainly driven by cost reductions, according to the report. In remote locations, in particular, diesel is an extremely expensive source for electricity generation and renewable energy is typically competitive without additional incentives.
The report says that although more and more microgrid projects are being realized, the bottleneck is still on the market side. However, many players have formed, or are in the process of forming, partnerships.
“We see two main targets for these partnerships: market access and technology enhancement by pooling complementary solutions,” said Dr. Thomas Hillig, managing director of THEnergy.
The report says that on the technology side, ABB has teamed up with Samsung and Ideal Power with LG Chem and Aquion Energy in order to provide tailor-made microgrid solutions featuring energy storage systems. The inverter manufacturers Fronius and Victron have also joined forces in a strategic partnership for smaller microgrids. For larger plants, the report continues, Schneider Electric has developed a control solution in cooperation with DEIF.
Sometimes, the objectives of the partnership are twofold. For microgrids, Caterpillar has lined up with First Solar. From a technology perspective, the report says Caterpillar covers diesel genset expertise, while from a market perspective, Caterpillar is a leading supplier in the mining industry – a key target sector of many microgrid players. First Solar contributes its PV experience.
Furthermore, the report says collaboration can go beyond pure strategic partnerships. For example, French utility ENGIE has invested $6 million in the California-based company Advanced Microgrid Solutions targeting utility microgrids. In addition, the report says French oil and gas major Total SA has acquired majority and minority stakes in several renewable energy and storage companies that cover key aspects of the microgrid value chain, such as SunPower, Saft, Aquion Energy, STEM, LightSail Energy, EnerVault, Ambri, Offgrid Electric, Powerhive, and DP Energy. It will be interesting to see if Total SA intends to integrate these investments in the future, the report notes.
“Especially for smaller players, strategic partnerships are an important vehicle for entering new markets,” commented Hillig, who later added that many U.S. and European companies “intend to access new markets through strategic partnerships.”
Chart courtesy of THEnergy