Microgrids are coming.

This week,  Wärtsilä announced the acquisition of Greensmith Energy, the US-based system integrator and software company which specialises in developing grid-scale energy storage solutions. This move marks the latest milestone for Wärtsilä as they continue to diversify into hybrid power solutions (and microgrids), including the integration of solar PV and energy storage alongside their traditional engine-based power generation offerings. The acquisition is expected to be completed in July 2017.

In April last year, Wärtsilä announced that it would enter the solar energy business by offering utility-scale solar photovoltaic (PV) solutions. The new solutions included solar PV power plants of 10 MWe and above, and hybrid power plants comprising solar PV installations and internal combustion engines. Both solutions are offered with full engineering, procurement and construction (EPC) capability. Wärtsilä has previously set a target of delivering 200 MWe of solar installations by 2018. It’s not clear whether this target will be revised following the acquisition. What is clear, however, is that Wärtsilä is serious about hybrids and moving outside their comfort zone of manufacturing and selling engines.

Germany’s ‘Energiewende’ (Energy Transition) is well publicised, and frequently referenced, as an example of how to (or not, depending on your point of view!) transform a country’s energy system away from low efficiency, high-carbon energy and towards an environmentally friendly, reliable energy system.

One of the fundamental pillars of the Energiewende is a support framework for renewable electricity generation. In the early 1990s, renewables accounted for less than 5% of yearly electricity generated in Germany. Today, the figure stands at around 35% - and the future direction of travel is clear.

Our research suggests that Mexico will become a ‘Global Top 10’ market for gas engines by 2020

Mexico’s energy reform is likely to herald increased activity in the field of distributed power. Since the Mexican government passed an historic energy bill in December 2013 - paving the way for deregulation of the electricity sector and bringing to an end state-owned CFE’s monopoly of the market - Delta-ee has witnessed growing evidence that Mexico is currently undergoing a period of sustained market growth, particularly in the field of stationary power gas engines.

The latest report from the Distributed Power Service shows that the global market for reciprocating gas engines used within stationary power applications is set for strong growth over the next five years. Our Global Gas Engine Statistics Report forecasts that for gas engines sized 400 kWe and above, the market will increase from 4.6 GWe in 2014 to 7.0 GWe by 2020, at a compound annual growth rate of over 7%.Falling oil and gas prices help, but global economic expansion and ‘green’ drivers underpin our forecast for global gas engine sales. Our research has identified very different drivers and trends in key markets such as Germany, UK, USA, Brazil, Japan and China.Throughout 2014 we have been researching in great detail the major global and emerging markets for gas engines. We found that nine countries make up more than half of the world’s gas engine market – these countries have been the focus of our research. Delta-ee’s Global Gas Engine Statistics Report details the key market drivers which are set to stimulate this growth, and provides detailed segmentation of sales data and forecasts, broken down by 6 global regions, 9 countries, and 6 size bands. For more information on our report, download this free Whitepaper, or contact John Murray at [email protected]

With a population of 1.4 billion and an economy which, by some measures, is larger than that of the US, almost all global industries are, to some extent, influenced by China. And while China is not normally the first market which comes to mind when the words ‘efficiency’, ‘decentralised’ and ‘energy’ are used in the same breath, there is no doubt that the sheer scale of the technical potential for distributed power investment makes China one market not to ignore. And so, at Delta-ee, we considered China as one of our nine global countries during ‘Year 1’ of our Distributed Power Service (DPS). The DPS considers the past, current and future market sizes for gas engines used within stationary power applications. By considering market drivers such as energy price trends, the evolving regulatory environment, macro-economic factors, the competitive landscape and end-user segments, we are able to compile detailed insight on which we base our year-on-year projections out to 2020. Here are three of the key observations from our China research:Coal mine (and coal bed) methane has taken a significant share of the Chinese gas engine market to date, but will likely have a falling influence in the period to 2020. This is partly due to the demise of the CDM (Clean Development Mechanism) funding stream which previously stimulated investment from overseas, but also due to the emergence of high-efficiency and renewable investments in other sectors. Nevertheless, Coal Mine/Bed Methane projects continue to come online, with both domestic and foreign gas engine manufacturers supplying units - normally in the sub-2 MWe size range.High-efficiency co- and tri-generation gas-fired projects will become increasingly prevalent. There has already been activity in this sector, with some high-profile projects already appearing. But this is just the tip of the iceberg. With emerging policy support in some regions – and Shanghai leading the way with capital grants and lower gas tariffs for high-efficiency co- and tri-generation developments – together with a continuous and growing need to address air quality issues in densely populated cities, there is strong evidence to suggest that this sector will exhibit growth to 2020.A shift towards gas-fired power generation will inevitably open up opportunities for large-scale, gas engine-based power plants. While there has been little activity in the ‘power plant’ segment for gas engines in China so far (for ‘power plant’, read multiple 10+ MWe gas engines used primarily for electricity grid export), past performance is unlikely to be a good indicator of the future in this case. The Chinese government has high ambitions to become less reliant on coal-fired power generation, with natural gas set to take an increasing share of the market. While much of this capacity will inevitably be met via large combined cycle gas turbines, towards the end of the decade, we expect multiple gas engine projects will have been announced – especially where flexible, high-efficiency generating capacity is required to meet peak demand. This is indicated via the light-blue bars in the chart above. To find out more about the Distributed Power Service, and our China research, please contact John Murray at [email protected]