By Eduardo Monteiro, Co-CIO at Victory Hill Capital Partners.
If rolled out at scale, microgrids would offer an opportunity for the UK to take a lead in the energy transition, writes Eduardo Monteiro.
The National Grid has an inefficiency problem. The UK's energy is primarily generated at large power stations located far from demand centres and is then distributed across the country through 7,700km of overhead lines and underground cables. While this centralised approach enables power generation at great scale, it comes at a cost. The vast distances electrons must travel between production and consumption means that in its current form, the grid loses up to 20% of electricity in transmission.
The UK's transition to a low-carbon energy mix could amplify this inefficiency further. Despite the majority of energy consumption taking place in the south, offshore windfarms in the North Sea supply a significant portion of the country's green energy and policymakers are fixated on increasing the number of these farms further. Fulfilling the government's target of 50GW of offshore wind capacity by 2030 could result in the loss of 10GW of energy due to inefficiency in where they are located.
