SCOTTMADDEN, INC. | 18 MICROGRIDS EXPAND: NEARLY 180 MICROGRIDS TODAY, ACCOUNTING FOR MORE THAN 1.9 GWS OF CAPACITY The number and dispersion of microgrids is growing, combined heat and power dominates, but interest in solar grows. Grid Transformation Is an Emerging Driver of Microgrid Activity U.S. Installed Microgrid Capacity** (in MWs) • After Superstorm Sandy, interest in microgrids grew, fed by resilience initiatives • Now, interest in resilience coupled with lower solar installed costs, favorable SREC pricing, and grid transformation efforts aimed at “greening” the grid (such as New York’s Reforming the Energy Vision) have led to an uptick in planned projects 2,500 2,250 2,000 • The MUSH sector—military, university, schools, and hospitals—and communities (largely remote*) continue to comprise the primary microgrid hosts, but there is also growth in non-remote* communities and data centers • Data centers are an increasing source of microgrid growth, perhaps unsurprising because of their “always on” requirements • And while solar- and battery-based microgrids are much discussed, natural gas-fired combined heat and power microgrids continue to dominate the market in terms of capacity • However, we may be one “killer app” or disruptive technology away from more rapid microgrid penetration (e.g., “in-the-money” storage, an economic Stirling engine, etc.) What Is a Microgrid? A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island mode. –U.S. Dept. of Energy 1,913 Total Generation Capacity (MWs) Traditional Applications and Technologies, However, Continue to Account for Most Installed Microgrids 1,750 1,500 1,250 1,000 1,026 750 500 250 0 Operational Planned Source: ScottMadden analysis and research