Gartner predicts that, through 2027, Fortune 500 companies will shift US$500 billion from energy operating expenditure (opex) to microgrids to mitigate chronic energy risks and meet AI demand.

Wikipedia defines a microgrid as a local electrical grid with defined electrical boundaries acting as a single and controllable entity. It can operate in grid-connected and island mode. A “stand-alone microgrid” or “isolated microgrid” only operates off-the-grid and cannot be connected to a wider electric power system.

“We are seeing warning signals that electricity demand is outstripping supply due to delays in investment and permitting,” said Lloyd Jones, VP Analyst at Gartner.

Fortune 500 companies are already investing in infrastructure, such as microgrids, as energy pricing and availability are reaching a tipping point. “In doing so, they are shifting their operational electricity spending from utilities to capital investment in dedicated electricity infrastructure projects,” said Jones. “This allows them to meet their own energy needs and better control their costs going forward.”

Gartner analysts discussed broader energy disruption and second-order effects associated with energy shortages at the Gartner IT Symposium/Xpo

Microgrids offer better return on investment

Microgrids are power networks that connect generation, storage and loads in an independent energy system. The system can operate on its own or with the main grid to meet the electricity needs of a specific area or facility.

“Microgrids are challenging the traditional business model of utility-provisioned electricity,” said Jones. “They offer companies a secured independent electricity system that may synchronise with the grid to trade energy resources when market conditions are favourable. As well as improving resilience, microgrids will provide renewable energy, lowering the carbon footprint.”

Investing in a microgrid involves significant upfront costs. Organisations should consider the long-term benefits, which include uninterrupted operations and protection against grid failures.

“For Fortune 500 organisations, who spend a fair amount of their operating expenses on energy, investing in microgrids offers a better return than continuing to pay volatile utility bills,” said Jones. “It also creates competitive advantage for day-to-day operations and derisks energy supply in the future.”

Electricity systems to become more dynamic

Whether organisations invest in microgrids or other power supply options, they should switch up power supply. “Delaying action exposes businesses to mounting costs and constraints caused by an outdated grid as high demand outpaces the availability of the existing system and its supply chains,” said Jones.

Gartner analysts expect the electricity systems will become more dynamic. Utilities, tech giants and the industry need to act now:

• Utilities should facilitate microgrids by looking for connectivity options to top up electricity supply while also innovating their products and services.
• Tech giants should anticipate that their social licence to operate will be questioned if they don't start addressing their own energy needs through mechanisms such as microgrids.
• The industry should anticipate volatile energy costs and assess the tipping point where investments in microgrids will derisk the business and guarantee growth.