Asia Pacific Microgrid Market: Current Analysis and Forecast (2024-2032)

The Asia Pacific Microgrid Market is growing at a steady rate of 23.7% in the forecast period due to the Increasing demand for reliable and resilient power supply. The Asia Pacific region has witnessed a surge in the reliable and resilient power supply market, primarily driven by rapid industrialization, urbanization, and economic growth. Conventional centralized power grids have often struggled to meet the ever-increasing energy demands, particularly in remote and rural areas. Microgrids have become a viable solution to this challenge by providing a localized and self-sufficient energy system. For instance, in May 2023, the Philippines' Department of Energy announced a partnership with the Asian Development Bank (ADB) to finance the development of microgrids in remote and off-grid areas. The project aims to provide reliable electricity access to over 200,000 households and businesses, ensuring energy security and fostering economic growth in these underserved regions. Moreover, Microgrids offer enhanced resilience against power outages caused by natural disasters, such as typhoons, earthquakes, and flooding, which are prevalent in many parts of the Asia Pacific region. Integrating renewable energy sources and energy storage systems allows microgrids to operate independently from the main grid, ensuring uninterrupted power supply during emergencies or grid failures. Moreover, in the aftermath of the devastating floods in Malaysia in December 2022, several communities relied on microgrids powered by solar panels and battery storage systems to maintain essential services and communications. This highlighted the critical role of microgrids in disaster recovery and emergency response efforts.

Based on components, the Asia Pacific microgrid market is segmented into Software & Services, and Hardware. Amongst components, the hardware segment dominated the market and is expected to behave this way in the forecast period. The demand for hardware such as protection relays, microgrid controllers, and controllers of solar inverters, battery inverters, diesel gensets, and other DERs is emerging on account of the mandates by the government for renewable energy in the power generation mix. The need to change the old aging electricity infrastructure requires the new software and, the need for the services. Also, the demand for managed services is also witnessing a sharp rise across the Asia Pacific.

Based on the type, the market is segmented into AC, DC, and Hybrid. The DC segment has the highest market share and is expected to maintain its position in the forecast period. DC Microgrids are being deployed in Asia Pacific as distributed energy, solar PV, energy storage, consumer electronics, and LED lights are inherently DC resources. As these devices comprise a large share of generation and demand, it is only natural to string them together on DC Microgrids. There are enormous opportunities for efficiency and system cost gains, as shown by research institutions, industrial facilities, and even DC homes. DC Microgrids DC Home Solar solutions are the primary means of rural electrification for the billion people who do not yet have grid electricity.

Based on connectivity, the Asia Pacific microgrid market is segmented into Grid Connected and Off-Grid. Amongst connectivity, the grid-connected segment has the highest market in 2023 and is expected to dominate in the forecast period. Off-grid microgrid systems are gaining popularity as the need for power outages in remote areas grows. There is an increasing demand for power infrastructure in rural areas, so installing off-grid microgrids to enhance the already built-up infrastructures in these regions is easiest. Moreover, the demand for off-grid connections is rising with the need to decentralize energy distribution and technologies and reduce grid reliability.

Based on power source, the Asia Pacific microgrid market is segmented into Diesel generators, Natural Gas, Solar PV, CHP, and Others. The natural gas segment generated revenue of USD 3,518.62 million in 2023 and is expected to grow at a CAGR of 24.6% during the forecast period to reach a market valuation of US$ 23,875.36 million by 2032F. Government policies favor integrating efficient and sustainable power generation to boost the natural gas (NG) powered microgrid infrastructure. Shifting towards renewable power sources and lowering their carbon footprint is boosting the use of natural gas microgrids

Based on storage, the Asia Pacific microgrid market is segmented into Lithium-ion, Lead Acid, Flow Battery, Flywheels, and Others. Amongst storage devices, the lithium-ion segment of the Asia Pacific microgrid market was valued at USD 7,248.79 million in 2023 and is likely to reach USD 45,423.52 million by 2032 and is growing at a CAGR of 23.5% from 2024-2032. Batteries are an important part of the microgrid system as they improve the performance, generator efficiency, and system reliability. These storage devices can minimize fuel consumption. Until recently, lead-acid storage devices were considered the most economical and the most popular. Recently, lithium-ion storage devices have gained popularity.

Based on application, the Asia Pacific microgrid market is segmented into Healthcare, Educational Institutes, Military, Utility, Industrial/ Commercial, Remote, and Others. Amongst applications, the remote segment has dominated the market in 2023 and is expected to dominate in the forecast period owing to the focus on energy resilience and reliability in isolated areas. The growth of the remote segment is fueled by the rising adoption of renewable energy sources like solar and wind power in remote areas. Furthermore, favorable government policies and initiatives promote the deployment of microgrids in remote and off-grid areas to enhance energy security and resilience.

For a better understanding of the market of the Asia Pacific microgrid market, the market is analyzed based on its country presence, such as China, Japan, India, and the Rest of Asia Pacific. China is actively promoting, developing, and deploying microgrids to enhance energy security, increase renewable energy utilization, and reduce carbon emissions. In 2023, China's clean energy sector, which includes renewable energy sources like solar, wind, hydro, etc., contributed an estimated 9.0% to the country's GDP, up from 7.2% in 2022. Additionally, the Chinese government has launched the "National Renewable Energy Microgrid Demonstration Program" to promote the construction of microgrids in remote and rural areas, and The "New Infrastructure" program, part of China's 14th Five-Year Plan, emphasizes the development of microgrids and integrated energy systems. Major manufacturing hubs like Guangdong, Jiangsu, and Zhejiang provinces are leading in installing solar and wind power capacity, indicating high renewable usage in industrial activities.

Some of the major players operating in the market include ABB, General Electric, Siemens AG, Eaton Corporation Inc., Schneider Electric SE, Honeywell International Inc., Caterpillar, Toshiba Corporation, Hitachi Energy Ltd, and General Microgrids.