O

RESEARCH REPORT

Executive Summary:
Navigant Research Leaderboard:
Remote Microgrid Players
Assessment of Strategy and Execution for 12
Remote Microgrid Companies

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Published 1Q 2019

Peter Asmus
Research Director

Adam Forni
Principal Research Analyst
 Navigant Research Leaderboard: Remote Microgrid Players

Section 1
EXECUTIVE SUMMARY
1.1 Market Introduction
Unlike past Leaderboard reports on microgrids that attempted to compare apples to apples
by focusing on controls offerings and required that vendors were active in grid-tied
microgrid markets, this report takes a different approach. Rather than narrow the scope of
companies to include, this report contains a variety of companies to reflect recent market
trends pointing to a diversity of vendors seeking opportunity in the remote microgrid space.
As a result, a value chain capture metric is included, highlighting how different categories
of companies compare on the all-important category of supply chain revenue generation
from remote microgrid project development. This is likely the most important metric in
evaluating remote microgrid vendors.

For example, Caterpillar is included in this report as a representative for fossil fuel
generator manufacturers looking to expand into the remote microgrid market. Likewise,
EDF is included as a utility given its pioneering efforts to invest in off-grid energy access
projects outside of its native market in France. These two examples represent extremes.
Most companies included represent developers or solutions providers. Most offer some
sort of controls, as that is the linchpin to project success. By including a diversity of
companies in this report, the hope is it captures the breadth of opportunity in the remote
microgrid space for vendors large and small in varied geographies. Many of these
companies are pursuing different product offerings and business models to capture value
chain revenue streams.

Remote microgrids never connect to a larger reliable grid and, therefore, operate in island-
mode on a 24/7 basis. These microgrids may interconnect with highly unreliable or weak
grids but provide energy services a majority of the time. Many of them are designed to
reduce diesel fuel consumption by integrating solar PV, distributed wind, or hydropower.
Navigant Research does not include pure diesel systems in its project tracking or forecasts
for remote microgrids—tracked systems need to incorporate at least one renewable
resource. In 2018, the global market for remote microgrids represented about $3 billion in
implementation spending. That annual tally is expected to jump to more than $10.2 billion
by 2027. The leading global region is Asia Pacific.

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 Navigant Research Leaderboard: Remote Microgrid Players

This report highlights 12 companies out of 100 that were considered. The criteria by which
companies are compared in this Navigant Research Leaderboard include:

• Vision
• Go-to-Market Strategy
• Partners
• Business Model Innovation
• Value Chain Capture
• Geographic Reach
• Sales, Marketing, and Distribution
• Controls Approach/Provider
• System Quality and Reliability
• Project Portfolio

• Pricing
• Staying Power

Detailed descriptions of each criterion are provided in the “Criteria Definitions” section.

1.2 The Navigant Research Leaderboard Grid

Companies are ranked on two different criteria: Strategy and Execution. Threshold scores
determine which category (Leader, Contender, Challenger, or Follower) they fall into. The
companies with the top three aggregate scores, qualifying as Leaders, are ENGIE, ABB,
and Optimal Power Solutions. Note that the companies profiled here are tightly clustered.
Schneider Electric just missed the Leader category, primarily because so many
acquisitions and investments into this market have yet to be validated as successful
endeavors since they were launched so recently.

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 Navigant Research Leaderboard: Remote Microgrid Players

Half of the companies ranked fall into the Contender category and three rank as
Challengers, including Larsen & Toubro, a large engineering and construction company
based in India that has the capability to achieve Leader status. The results of this
Leaderboard validate the view that no single company leads the remote microgrid market.
Most of the 12 profiled companies, and perhaps a dozen more, are positioned to emerge
as Leaders in this market over the next 10 years.

Chart 1-1. The Navigant Research Leaderboard Grid

FOLLOWERS CHALLENGERS CONTENDERS LEADERS

Optimal Power
Solutions

ABB ENGIE

OutBack Power Schneider

Electric
EDF
Husk Power Caterpillar
Systems
Execution

Powerhive

Larsen & Toubro

juwi
PowerGen
Renewable Energy

Strategy
(Source: Navigant Research)

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 Navigant Research Leaderboard: Remote Microgrid Players

Section 6
TABLE OF CONTENTS

Section 1 ...................................................................................................................................................... 1

Executive Summary .................................................................................................................................... 1

1.1 Market Introduction ....................................................................................................................... 1

1.2 The Navigant Research Leaderboard Grid ................................................................................... 2

Section 2 ...................................................................................................................................................... 4

Market Overview .......................................................................................................................................... 4

2.1 Defining Remote Microgrids .......................................................................................................... 4

2.2 Remote Microgrid Market Drivers ................................................................................................. 4

2.2.1 Lack of Energy Access in Key Developing World Markets ..................................................... 5

2.2.2 Incremental Energy Consumption Growth Patterns ................................................................ 5

2.2.3 Declining Costs of Key Microgrid-Enabling Technologies ...................................................... 6

2.2.4 Global Energy Access Initiatives ............................................................................................. 6

2.3 Remote Microgrid Market Barriers ................................................................................................ 7

2.3.1 Private Capital Flowing Primarily to Grid-Tied Microgrids ....................................................... 7

2.3.2 Subsidies that Support the Status Quo ................................................................................... 8

2.3.3 Energy Theft ............................................................................................................................ 8

2.3.4 Lack of International Standards Targeting Remote Applications ............................................ 8

2.4 Recent Global Remote Microgrid Market Trends.......................................................................... 9

2.4.1 Energy as a Service Business Models .................................................................................... 9

2.4.2 Plug-and-Play Modular Microgrids .......................................................................................... 9

2.4.3 Larger Players Entering the Market......................................................................................... 9

2.4.4 Remote Microgrid Segments ................................................................................................. 10

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 Navigant Research Leaderboard: Remote Microgrid Players

2.4.4.1 Commodity Extraction................................................................................................... 10

2.4.4.2 Physical Islands ............................................................................................................ 10

2.4.4.3 Village Electrification..................................................................................................... 10

Section 3 .................................................................................................................................................... 12

The Navigant Research Leaderboard ..................................................................................................... 12

3.1 The Navigant Research Leaderboard Categories ...................................................................... 12

3.1.1 Leaders.................................................................................................................................. 12

3.1.2 Contenders ............................................................................................................................ 12

3.1.3 Challengers ........................................................................................................................... 12

3.1.4 Followers ............................................................................................................................... 12

3.2 The Navigant Research Leaderboard Grid ................................................................................. 13

Section 4 .................................................................................................................................................... 15

Company Rankings................................................................................................................................... 15

4.1 Leaders ....................................................................................................................................... 15

4.1.1 ENGIE ................................................................................................................................... 15

4.1.2 ABB ....................................................................................................................................... 17

4.1.3 Optimal Power Solutions ....................................................................................................... 19

4.2 Contenders .................................................................................................................................. 20

4.2.1 Schneider Electric ................................................................................................................. 21

4.2.2 EDF ....................................................................................................................................... 23

4.2.3 Caterpillar .............................................................................................................................. 25

4.2.4 OutBack Power...................................................................................................................... 27

4.2.5 Husk Power Systems ............................................................................................................ 29

4.2.6 Powerhive .............................................................................................................................. 31

4.3 Challengers ................................................................................................................................. 32

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 Navigant Research Leaderboard: Remote Microgrid Players

4.3.1 Larsen & Toubro .................................................................................................................... 33

4.3.2 PowerGen Renewable Energy .............................................................................................. 35

4.3.3 juwi ........................................................................................................................................ 37

Section 5 .................................................................................................................................................... 39

Acronym and Abbreviation List ............................................................................................................... 39

Section 6 .................................................................................................................................................... 40

Table of Contents ...................................................................................................................................... 40

Section 7 .................................................................................................................................................... 43

Table of Charts and Figures..................................................................................................................... 43

Section 8 .................................................................................................................................................... 44

Scope of Study and Methodology ........................................................................................................... 44

8.1 Scope of Study ............................................................................................................................ 44

8.2 Sources and Methodology .......................................................................................................... 44

8.2.1 Vendor Selection ................................................................................................................... 45

8.2.2 Ratings Scale ........................................................................................................................ 45

8.2.2.1 Score Calculations ........................................................................................................ 45

8.2.3 Criteria Definitions ................................................................................................................. 46

8.2.3.1 Strategy ........................................................................................................................ 46

8.2.3.2 Execution ...................................................................................................................... 46

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 Navigant Research Leaderboard: Remote Microgrid Players

Section 7
TABLE OF CHARTS AND FIGURES

Chart 1-1. The Navigant Research Leaderboard Grid ............................................................................. 3

Chart 2-1. Annual Remote Microgrid Implementation Spending by Region, Base Scenario, World
Markets: 2018-2027................................................................................................................. 5

Chart 3-1. The Navigant Research Leaderboard Grid ........................................................................... 13

Chart 4-1. ENGIE Strategy and Execution Scores ................................................................................. 16

Chart 4-2. ABB Strategy and Execution Scores ..................................................................................... 18

Chart 4-3. Optimal Power Solutions Strategy and Execution Scores .................................................... 20

Chart 4-4. Schneider Electric Strategy and Execution Scores ............................................................... 22

Chart 4-5. EDF Strategy and Execution Scores ..................................................................................... 24

Chart 4-6. Caterpillar Strategy and Execution Scores............................................................................ 26

Chart 4-7. OutBack Power Strategy and Execution Scores ................................................................... 28

Chart 4-8. Husk Power Systems Strategy and Execution Scores.......................................................... 30

Chart 4-9. Powerhive Strategy and Execution Scores ........................................................................... 32

Chart 4-10. Larsen & Toubro Strategy and Execution Scores ................................................................. 34

Chart 4-11. PowerGen Renewable Energy Strategy and Execution Scores ........................................... 36

Chart 4-12. juwi Strategy and Execution Scores ...................................................................................... 38

Figure 2-1. Remote Microgrid Value Chain Components .......................................................................... 4

Table 3-1. The Navigant Research Leaderboard Overall Scores .......................................................... 14

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 Navigant Research Leaderboard: Remote Microgrid Players

Section 8
SCOPE OF STUDY AND METHODOLOGY
8.1 Scope of Study
This study leverages company profiles developed for Navigant Research reports on
microgrids dating back to 2009. Data on actual project deployments contained in Navigant
Research’s Microgrid Deployment Tracker were also incorporated into the analysis.
Furthermore, insights and data derived from a number of projects focused on business
models, microgrid controls pricing and functionality, and the identification of the most
promising geographic and segment markets also factored into the scoring.

Navigant Research’s deep knowledge of the microgrid space is unparalleled. This

Leaderboard represents the opportunity to present findings in a ranking format, reflecting
the global nature of this market and the key role both established technology companies
and new product and project innovators are playing in the marketplace. Unlike Navigant
Research’s last two Leaderboard reports on microgrids, this update broadens the pool of
potential candidates by not limiting to companies offering their own controls platform but
narrows the application focus to just remote microgrids.

8.2 Sources and Methodology

Navigant Research’s industry analysts utilize a variety of research sources in preparing
Research Reports. The key component of Navigant Research’s analysis is primary
research gained from phone and in-person interviews with industry leaders including
executives, engineers, and marketing professionals. Analysts are diligent in ensuring that
they speak with representatives from every part of the value chain, including but not limited
to technology companies, utilities and other service providers, industry associations,
government agencies, and the investment community.

Additional analysis includes secondary research conducted by Navigant Research’s

analysts and its staff of research assistants. Where applicable, all secondary research
sources are appropriately cited within this report.

These primary and secondary research sources, combined with the analyst’s industry
expertise, are synthesized into the qualitative and quantitative analysis presented in
Navigant Research’s reports. Great care is taken in making sure that all analysis is well-
supported by facts, but where the facts are unknown and assumptions must be made,
analysts document their assumptions and are prepared to explain their methodology, both
within the body of a report and in direct conversations with clients.

Navigant Research is a market research group whose goal is to present an objective,

unbiased view of market opportunities within its coverage areas. Navigant Research is not
beholden to any special interests and is thus able to offer clear, actionable advice to help

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 Navigant Research Leaderboard: Remote Microgrid Players

clients succeed in the industry, unfettered by technology hype, political agendas, or

emotional factors that are inherent in cleantech markets.

8.2.1 Vendor Selection

Unfortunately, some high profile companies were excluded due to lack of available data on
installations. Others, including other energy storage vendors, oil companies, and utilities,
also did not make the final list primarily due to lack of available data or lack of transparency
in remote microgrid endeavors. Other major players in the microgrid space have not gained
sufficient traction in the remote power space to warrant inclusion within the top 12 list since
the scope of analysis excluded military applications.

This collection of companies was curated to highlight a mixture of well-known brands,

lesser known innovators, and geographical diversity, judging them each on identical criteria
despite their different structures, emphasis, and vintage. This report sheds light on how
each company category—utility, controls provider, developer, generator manufacturer—
compares when ranked on identical criteria. The purpose is not only to rank companies to
gain insight into the competitive landscape but also to educate the market about innovation
occurring across geographies, technologies, and business models.

8.2.2 Ratings Scale

Companies are rated relative to each other using the following point system. The ratings
are a snapshot in time, showing the current state of the company. These scores are likely
to be fluid as new competitors enter the market and customer requirements evolve.

• Very Strong 91 – 100

• Strong 76 – 90
• Strong Moderate 56 – 75
• Moderate 36 – 55
• Weak Moderate 21 – 35
• Weak 11 – 20
• Very Weak 1 – 10

8.2.2.1 Score Calculations

The scores for Strategy and Execution are weighted averages based on the subcategories.
The overall score is calculated based on the root mean square of the Strategy and
Execution scores.

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 Navigant Research Leaderboard: Remote Microgrid Players

8.2.3 Criteria Definitions

8.2.3.1 Strategy
• Vision: Measures the company's stated goals in designing market solutions against
the actual needs of customers based on the entire environment in which they will
operate. Clear and compelling visions that are effectively communicated to the industry
result in higher scores.

• Go-to-Market Strategy: Evaluates the company's strategy for reaching the target
market, including the sales and marketing channels to be used, as well as the
processes established for informing the target market about brand differentiation and
unique product value.
• Partners: Measures the company's established partnerships with key organizations
that will provide an advantage in financial backing, sales, business, and project
development. Affiliations with well-known controls, battery, distributed generation, and
financing sources in the supply chain positively affect scores in this Navigant Research
Leaderboard.
• Business Model Innovation: Evaluates the innovation the vendor brings to the table
in terms of business models that meet both the needs of the customer and the bottom
line of the solutions provider. This is a metric that grows increasingly important as this
remote microgrid market matures.
• Value Chain Capture: Linked to the metric on business model innovation, scoring is
based on how much of the value chain the company captures with its offering. The
more complete the capture of possible revenue streams, the higher the score.
• Geographic Reach: An evaluation of companies’ ability to reach national and
international customers. Scores are lower if the company is only active on one
continent and higher if sales occur across multiple regions.
8.2.3.2 Execution
• Sales, Marketing, and Distribution: Evaluates the company’s marketing and sales
performance and current distribution channels. Higher scores are given to companies
with effective messaging and viable networks with access and support for current
remote microgrid products and services.
• Controls Approach/Provider: Evaluates the vendor’s controls platform ownership.
Does it rely upon another company’s product that has proven market success? Does
the controls approach take advantage of lessons learned by integration of variable
renewables and advanced energy storage?
• System Quality and Reliability: Evaluates the quality and reliability of remote
microgrids deployed, with rankings based on performance in the field systems
delivering on financial, resiliency, and renewable energy integration goals.

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 Navigant Research Leaderboard: Remote Microgrid Players

• Project Portfolio: How many projects has the vendor brought online and what is the
total capacity of those projects? If available, how does the future project pipeline look?
• Pricing: Determines the suitability of microgrid component pricing based on its feature
set, including whether products are available at multiple price points and how pricing
compares to that of competitor products.
• Staying Power: Evaluates whether the company has the financial resources to
withstand weak or variable markets and price-based assaults by competitors. Higher
scores are given to companies with better financial performance and more capability to
survive market downturns. Lower scores are for more fragile companies without deep
pockets or backing by steady financial investors.

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 Navigant Research Leaderboard: Remote Microgrid Players

Published 1Q 2019

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