SAUDI ARABIA MICROGRID MARKET

Saudi Arabia microgrid market is expected to grow at a robust CAGR driven by the rapid industrialization along with growing need for energy storage solutions and the necessity for consistent power delivery.

Major Market Drivers and Emerging Trends

The push for energy diversification and improved energy dependability is driving significant growth in the Saudi Arabia microgrid market size. Microgrids are crucial in Saudi Vision plan which emphasizes sustainability and renewable energy integration while upgrading its energy infrastructure.

A microgrid is a localized energy system that includes distributed generation sources situated close to the energy loads they support. A microgrid can seamlessly disconnect and connect from the main grid. Microgrids are tailored to enhance renewable energy usage including generation systems and storage solutions. Microgrids also offer grid backup during emergencies and are monitored by a controller that is often positioned close to the consumption zones.

Major factors fueling market growth include the rising need for continuous power supply along with rapid industrial development. The surging population growth will also increase the need for energy storage solutions which further contributes to market growth.

Through various initiatives like the National Transformation Program under Saudi Vision the government is focusing on digital infrastructure while enhancing quality and access to healthcare services which drives the need for microgrid. The Saudi Arabia microgrid market is further growing driven by policies and funding programs to support its deployment. King Abdullah City for Atomic and Renewable Energy or KACARE has been working on an energy mix project in recent years to integrate microgrid technologies into the Saudi EPS.

The expanding infrastructure sector will also drive the rising need for microgrids in the years ahead. Saudi Vision is leading through a significant transformation aimed at diversifying its economy and advancing innovation. Giga Projects are driving this transformation with massive infrastructure initiatives that will significantly impact its urban design and technological capabilities. Projects like a smart city NEOM and a cultural hub Qiddiya reflect its commitment to development. This further offers significant opportunities in construction while simultaneously driving the microgrid market growth.

Additionally the growing energy projects like the Sakara solar power facility along with the rising need for microgrids in sectors including military and healthcare will further drive market growth. Microgrids which integrate renewable sources are suitable to meet the growing need for cleaner energy solutions. This supports the broader objectives to diversify its energy sources while reducing its dependence on conventional fossil fuels.

The increasing focus on environmental protection and the rising renewable energy solutions have driven the need for efficient energy management. By optimizing renewable energy the microgrid ensures a reliable energy supply whenever it is required. The increasing electricity consumption along with the growing smart cities and the need to lower carbon footprints have prompted many utility service providers to invest in renewable energy for their operations.

With a focus on the Saudi Green program the kingdom is targeting 50 percent renewable energy generation by 2030 and plans to plant ten billion trees in the years ahead. The growing renewable energy adoption including wind and solar power is thereby fueling the need for microgrids which can integrate the sources and handle their fluctuations. Therefore the rising need for renewable energy is contributing to the Saudi Arabia microgrid market growth.

The ongoing developments in microgrid technologies like machine learning and AI are also improving its efficiency which further fuels the need for these solutions. By utilizing predictive algorithms and data analytics the microgrid management system can streamline operations while boosting energy performance. The lithium ion batteries adoption along with advancements in energy storage solutions is further driving the microgrid implementation that store surplus energy while offering backup during power outages.

However the significant costs related to maintenance and installation may impede market growth in the upcoming years. Building a microgrid requires substantial investments in infrastructure including complex management systems for grid control and energy storage solutions. It also needs investment for renewable energy infrastructure like wind and solar power plants. The costs are further driven by the need for specialized equipment and the connection to the current grid infrastructure.

Based on connectivity, the off grid connected segment is projected to experience a higher CAGR in the forecast years driven by the growing microgrids adoption in remote areas across Saudi Arabia. The difficulties in transporting electricity and expensive fossil fuel resources are promoting the microgrids deployment which provides an efficient solution for remote areas throughout the country.

By offering the software segment is expected to dominate the market in the coming years. This is attributed to the increase SaaS adoption in numerous industries and commercial sites. The system allows microgrid operators to seamlessly control distributed power generation which incorporates load and climate forecasting capabilities.

Based on end use the utility segment dominates the market share throughout the forecast period. Saudi Arabia has revealed plans to initiate 93 projects primarily focused on enhancing its utility infrastructure by investing USD 2.2 billion. These projects are intended to primarily boost environmental sustainability and agricultural systems in the region. The increased government spending on utility infrastructure in the forecast year is likely to fuel segment growth which further supports economic recovery following the crisis.

Top Market Players

The market features notable players including ABB, General Electric, Schneider, Siemens, Exelon Corporation and many more.

Key Developments

• • In 2024 Huawei has successfully finished building a microgrid energy station in Saudi Arabia. It is the biggest microgrid power station in the world with the ability to produce one billion kWh of energy each year. This localized and discreet energy solution will provide electricity to the Red Sea New City development. Saudi Arabia is significantly depending on Huawei to supply electricity for its Red Sea initiative.
  • In 2023 Modon and General Electric Saudi Arabia signed an agreement to develop an industrial complex aimed at supporting SMEs or entrepreneurs in line with the National Industry Plan. The deal is also aligned with the Saudi Vision which focuses on the economic diversification.

Segments covered in the Report:

The Saudi Arabia Microgrid Market has been segmented on the basis of Connectivity, Type, Pattern, and Offering. Based on Connectivity, the market is segmented into Grid Connected and Off-grid Connected. Based on Type, the market is segmented into AC Microgrids, DC Microgrids, and Hybrid. Based on Pattern, the market is segmented into Urban/Metropolitan, Semiurban, and Rural/Island. Based on Offering, the market is segmented into Hardware and Software & Services. The Hardware segment is further segmented into Power Generators, Energy Storage Systems, and Controllers.

Market Segmentation

Saudi Arabia Microgrid Market by Connectivity

• • Grid connected
  • Off-grid connected

Saudi Arabia Microgrid Market by Type

• • AC microgrids
  • DC microgrids
  • Hybrid

Saudi Arabia Microgrid Market by Pattern

• • Urban/metropolitan
  • Semiurban
  • Rural/island

Saudi Arabia Microgrid Market by Offering

• • Hardware
    • Power generators
    • Energy storage systems
    • Controllers
  • Software & services

Saudi Arabia Microgrid Market Leading players

• • ABB
  • General Electric
  • Schneider
  • Siemens
  • Exelon Corporation