APAC Micro Grid Market Outlook to 2030

APAC Micro Grid Market Overview

• The APAC Micro Grid Market was valued at USD 6 billion in 2023, driven by the rising demand for energy security, significant investments in renewable energy, and government initiatives promoting decentralized energy systems. Microgrids are crucial for providing reliable power supply, especially in remote and off-grid areas, making them an essential component of the regions energy infrastructure.
• The APAC microgrid market is dominated by key players such as ABB, Siemens, General Electric, Schneider Electric, and Hitachi Energy. These companies have established a strong presence in the region by offering advanced microgrid solutions that cater to various applications, including industrial, commercial, and residential sectors. Their continuous investment in research and development, coupled with strategic partnerships and acquisitions, has enabled them to maintain a competitive edge in the market.
• cities like Shanghai, Tokyo, and Sydney dominate the APAC microgrid market due to their advanced infrastructure and strong government support for smart grid initiatives. Shanghai, for instance, has been a pioneer in adopting microgrid technology to enhance energy efficiency and reduce carbon emissions. Tokyos commitment to renewable energy integration and Sydneys focus on sustainable urban development have also contributed to their leading positions in the market.
• Hitachi Energy (2018): Hitachi Energy has been actively deploying microgrid solutions across the Asia-Pacific region. Their approach includes integrating renewable energy sources such as solar and wind with advanced battery storage systems. This strategy aims to enhance energy reliability and sustainability, particularly in remote and underserved communities.

APAC Micro Grid Market Segmentation

The APAC Micro Grid Market can be segmented based on type, application, and region:

By Type: The market is segmented by type into grid-connected microgrids, off-grid microgrids, and hybrid microgrids. In 2023, grid-connected microgrids dominated the market due to their extensive use in urban areas and industrial zones, providing a stable and reliable power supply while integrating renewable energy sources.

By Application: The market is also segmented by application into industrial, commercial, residential, and utility sectors. In 2023, the industrial sector dominated the market, driven by the need for reliable and uninterrupted power supply in manufacturing and processing industries, particularly in rapidly developing countries like China and India.

By Region: The APAC microgrid market is segmented regionally into China, India, Japan, South Korea, and Australia. In 2023, China and India emerged as the leading countries. China's dominance is attributed to its aggressive investment in renewable energy and microgrid projects as part of its broader energy transition strategy.

APAC Micro Grid Market Competitive Landscape

• In 2023, GE's Grid Solutions business was selected by Saha Group, one of Thailand's largest industrial conglomerates, to provide the microgrid control system for what will be Thailand's largest private microgrid project. The microgrid will integrate multiple energy sources, including GE's aeroderivative gas turbines and solar power, to create a resilient and sustainable energy system for Saha Group's industrial park. This project showcases GE's commitment to advancing microgrid technology and renewable energy integration in the APAC region.
• In 2023, Siemens has been advancing its microgrid technology, including the development of software solutions that optimize energy management and grid stability. Their microgrid control systems are designed to facilitate the integration of diverse energy sources, enhancing the overall resilience of the energy supply.

APAC Micro Grid Industry Analysis

APAC Micro Grid Market Growth Drivers:

• Increasing Demand for Energy Security and Reliability: The growing demand for energy security across the APAC region is a significant driver for the microgrid market. As countries like India face frequent power outages due to aging grid infrastructure, the deployment of microgrids has become essential for providing uninterrupted power supply, particularly in remote areas.
• Government Support and Subsidies: Governments across the APAC region are providing substantial support for microgrid development. For instance, Japan has set ambitious targets for renewable energy to account for 36-38% of its energy mix by 2030, creating opportunities for microgrid deployment alongside renewable energy projects.
• Rapid Urbanization and Industrialization: Rapid urbanization and industrialization in the APAC region have led to soaring energy demand, prompting the adoption of microgrid solutions to ensure reliable electricity supply, particularly in remote or underserved regions.This trend is expected to continue driving the growth of the microgrid market in the coming years.

APAC Micro Grid Market Challenges:

• Regulatory and Policy Barriers: The regulatory landscape for microgrids in the APAC region is often fragmented and inconsistent, posing a challenge for market growth. In recent years, reports have highlighted the lack of standardized regulations governing microgrid operations, leading to delays in project approvals and increased costs.
• Technical Challenges and Grid Integration Issues: Technical challenges related to the integration of microgrids with the central grid remain a significant obstacle in the APAC market. Many microgrid projects face technical issues during grid integration, leading to operational inefficiencies and increased costs. These challenges often arise from the variability of renewable energy sources, such as solar and wind, which can cause fluctuations in power supply.

APAC Micro Grid Market Government Initiatives:

• Japan's Renewable Energy Targets: Japan has set ambitious targets for renewable energy to account for 36-38% of its energy mix by 2030. This goal creates opportunities for microgrid deployment alongside renewable energy projects, as the government supports the integration of distributed energy resources and energy storage systems.
• The Philippine Energy Plan:The Philippine government has awarded the Maharlika Consortium a contract to develop microgrids in eight unserved areas of Cebu, Quezon, and Palawan. These hybrid systems, incorporating solar, energy storage, and diesel generators, must provide 24/7 electricity within 18 months. This initiative supports the Microgrid Systems Act of 2022, aiming to electrify nearly 4 million underserved households in the country.

APAC Micro Grid Future Market Outlook

The APAC microgrid market is expected to witness significant growth from 2023 to 2028, driven by the rising adoption of renewable energy sources, increasing government support for decentralized energy systems, and advancements in energy storage technologies. The focus on energy resilience, particularly in disaster-prone areas, will further propel the market forward.

Future Market Trends

• Integration of Advanced Energy Storage Systems: Over the next five years, the integration of advanced energy storage systems will become a key trend in the APAC microgrid market. These systems will help address the intermittency of renewable energy sources, ensuring a stable and reliable power supply, particularly in off-grid and remote areas.
• Expansion of Microgrids in Urban Areas: Over the next five years, the deployment of microgrids in urban areas will grow significantly, driven by the need to modernize aging grid infrastructure and support the development of smart cities. Urban microgrids will increasingly integrate renewable energy, electric vehicles, and smart grid technologies.