The microgrid market is expected to grow at a CAGR of 13% during the forecast period. Increasing government support, drivers.2, and drivers.3 are some of the significant factors fueling microgrid market growth.
Increasing government support
Based on IEA data from World Energy Outlook 2017 Special Report - Energy Access Outlook 2017, in 2016, Africa had more than 588 million people that lacked access to electricity. In such places, microgrids are seen as a viable option to provide electricity to the poorest of the population without significantly increasing pollution in the country. The falling renewable technology costs have made renewable-based microgrids an attractive option in regions where it is expensive for utilities to extend power infrastructure to provide electricity. Developing countries are attractive markets for the deployment of microgrids as they enable one to bypass the old electricity infrastructure in favor of new cleaner technologies. The deployment of microgrids helps in achieving the same goal of electrification without requiring large immediate investments.
Companies such as Enel and General Electric are constructing microgrids in South Africa, where power is distributed mainly to villages rather than to the entire nation. In 2015, seven energy companies, such as ABB, EDF, Alstom (acquired by General Electric in November 2015), Engie, Eskom, First Solar, and Schneider Electric, joined forces to accelerate the deployment of renewable-based microgrids in South Africa. In 2016, ABB showcased a solar-diesel microgrid at its Longmeadow Business Estate in Johannesburg. This was done with the aim to expand its footprints in South Africa, where innovative technologies such as microgrids are able to address real-world challenges of providing cost-effective, continuous, and reliable power supply.
In April 2020, the African Development Bank offered technical assistance for the development of mini green energy grids in Guinea. The bank approved a grant of $80,000 to support the Guinean Agency for Rural Electrification (AGER) in the establishment of green mini-grid projects in the Republic of Guinea.
In March 2019, the bank approved a $20 million facility for the Green Mini-Grid Program in the Democratic Republic of Congo. In July 2019, the bank had approved a new financing program for energy providers in sub-Saharan Africa to benefit from off-grid power by 2025.
All these factors are expected to boost the demand for microgrids in the region during the forecast period.
