OVERVIEW - Many new partnerships are forming in solar, wind microgrid markets

Microgrid consultancy THEnergy sees increasing interest in strategic partnerships for both main segments of the microgrid market: remote solar- or wind-diesel hybrid and utility microgrids.

Microgrids are one of the hottest topics in the renewable energy world. Solar and wind energy are changing the paradigms of electricity generation toward more decentralised 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. In remote locations, in particular, diesel is an extremely expensive source for electricity generation and renewable energy is typically competitive without additional incentives.

Recently, though more and more projects are being realised, the bottleneck is still on the market side. 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”, says Dr Thomas Hillig, Managing Director of THEnergy.

On the technology side, ABB (STO: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, 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 (NASDAQ:FSLR). From a technology perspective, 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 photovoltaics expertise.

Sometimes the collaboration goes beyond pure strategic partnerships. The French utility Engie (EPA:ENGI) has invested USD 6 million in the California-based company Advanced Microgrid Solutions (AMS) targeting utility microgrids. The French oil and gas major Total SA (EPA:FP) has acquired majority and minority stakes in several renewable energy and storage companies that cover key aspects of the microgrid value-chain. Among the investments are SunPower (NASDAQ:SPWR), Saft, Aquion Energy, STEM, LightSail Energy, EnerVault, Ambri, Offgrid Electric, Powerhive, and DP Energy. It will be interesting to see if Total intends to integrate these investments in the future.

“We have been working with several companies in screening the microgrid market landscape for potential partners and have assisted them in setting up partnerships. Especially for smaller players, strategic partnerships are an important vehicle for entering new markets”, says Hillig. “At this stage, many of our European and American customers intend to access new markets through strategic partnerships.”

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