The UK’s energy mix is undergoing rapid change, with renewables playing an increasingly important role. In the first quarter of 2023, a record 47.8% of the energy mix will come from low-carbon sources. The government aims to use clean sources for all electricity generation by 2035. However, this transition is more than simply replacing one technology with another.
One of the challenges of this transition is connecting large renewable energy projects to the electrical grid. Edward Lees, co-head of the Environmental Strategies Group at BNP Paribas, emphasized the need for a total reimagining of the network, moving from a centralized model to a more local and dynamic system. This is consistent with the three Ds of the energy transition: decarbonization, decentralization and digitalization, which is worth $115 trillion.
Decentralization plays an important role in empowering communities to manage their energy security. Homeowners installing solar panels on their roofs reflect this shift toward decentralized energy systems. As home solar installations become more popular, local energy networks known as microgrids are emerging. These microgrids operate at the community level and are usually self-sufficient, relying only on the national grid when needed.
Companies like Sunnova are investing in software that allows local assets to be grouped into networks, encouraging the development of microgrids. This method offers advantages such as robustness and efficiency. In a microgrid, even if a portion of the assets are affected, the rest can continue to provide power to the grid. This system is more efficient than the national grid, which loses almost 10% of the electricity in transit, which leads to higher costs for consumers.