The Middle-East and Africa micro grids market is expected to grow at a CAGR of over 8% during the forecast period. Factors such as increasing demand for reliable and continuous power supply, to reduce the over-dependence on power grids and preventing power blackouts during natural calamities, microgrids are being installed in greater numbers, which is driving the market. Moreover, renewable power is increasingly being used to provide electricity to remote locations, by connecting to remote power systems microgrid, which is economically efficient in comparison to large power plants. However, the reluctance shown by several industries that still prefer conventional electricity over microgrids owing to a better return on investment is restraining the market growth.
– The commercial and industrial facilities are more sensitive to power outages than other sectors, and a short period of an outage can lead to substantial losses. C&I sector is increasingly moving toward locally built independent power sources that can be distributed by microgrid network.
– Rising electrification projects in Asia-Pacific and Africa, such as Western Africa Regional Off-grid Electrification Project and other remote locations, presents an opportunity for the microgrid market players.
– United Arab Emirates is expected to witness significant demand in the forecast period, owing to the targets and policies helping the renewable energy sector grow in the country.
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Key Market Trends
Commercial and Industrial Sector to Witness Significant Growth
– In many developing countries, the power sector suffers untimely power outages, owing to the insufficient power supply, and poor transmission and distribution networks that require frequent maintenance.
– Therefore, C&I sector is increasingly moving toward locally built independent power sources that can be distributed by the microgrid network rather than being dependent on electricity supply through the national grid.
– Renewable energy sources, such as solar energy, are witnessing substantial growth in the C&I sector, particularly in developed countries across the Middle-East and Africa region, owing to their minimal impact on the environment.
– The growth of the commercial & industrial segment can be attributed to the consistent requirement for uninterrupted electricity supply to carry out smooth industrial operations to reduce downtime, improve the efficiency of the workforce, and reduce equipment damages. As the achievement of carbon reduction targets is mandatory for commercial and industrial sectors, it has led to the increased adoption of microgrids for commercial & industrial end use.
– Also, an increasing number of commercial & industrial companies from major countries like Saudi Arabia, United Arab Emirates, etc. are implementing low-carbon microgrids, thus driving the demand for microgrid market in Middle-East and Africa region.
– Therefore, the declining cost of renewable, combined with technological advancements in energy storage systems customized commercial sector, is expected to help support the growth of the market.
United Arab Emirates Driving the Market Demand
– The United Arab Emirates has undertaken significant strides over the past several years and is leading the region’s drive toward renewable energy, particularly in the solar sector. To meet rising demand, the country has embarked on a challenging mission to increase energy security, diversify its energy sources, and increase the share of solar in its power mix.
– The United Arab Emirates aims to produce nearly half of its electricity through renewable resources by 2050, with Dubai trying for nearly 75%. The probability of achieving these targets is high, but it can be done with the ease of lower cost of photovoltaic panels and batteries.
– In Jan 2019, Dubai Electricity and Water Authority (DEWA) had launched a new smart grid station, SGS, that helps to implement technologies that link smart buildings for the exchange of information, improve energy and water efficiency, and also optimize renewable energy in smart cities.
Middle-East and Africa Micro Grids Market Size in 2022 : 8% CAGR with Top Countries Data, Key Regions and Growth Forecast to 2031
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