For the real estate sector, this challenge is increasingly felt at the level of individual assets and portfolios, where energy performance, resilience, and cost directly affect occupier demand and asset value. As businesses seek greater control over their energy use and carbon footprint, two solutions are gaining traction: microgrids and private wire renewables. They appear similar and both offer routes to decarbonisation and resilience, however, they differ in structure, complexity, and suitability.

Microgrids: Shared infrastructure for multiple users

Microgrids are local energy systems that connect distributed generation assets, such as solar panels, wind turbines, battery storage, or gas generators, to multiple nearby consumers via private infrastructure. Unlike traditional grid connections, microgrids operate independently or in parallel with the public grid, offering enhanced energy security and flexibility.

They are not new. For over 140 years, critical infrastructure like military bases, airports, hospitals, universities, and ports have used microgrids to ensure uninterrupted power supply. Their ability to serve multiple users makes them ideal for sites with diverse energy needs.

However, microgrids come with greater regulatory and technical complexity than private wire projects. Because they distribute electricity to more than one occupier, they are subject to stricter regulatory requirements, this can make them more difficult and costly to fund, design, and implement.

Private wire: Simpler, direct connections

Private wire, also known as direct wire, offers a more straightforward alternative. These behind-the-meter connections link a renewable energy asset directly to a single customer, bypassing much of the public grid and its associated costs.

There are two main types of private wire projects:

• Rooftop solar and battery storage: These can often be installed and operational within weeks, offering a quick route to on-site renewable generation.
• Over-the-fence connections: These involve installing generation assets on adjacent land and connecting them directly to the customer. While these typically take 18 to 24 months to deliver, they offer greater capacity and flexibility, including the potential to incorporate technologies like solar PV and wind turbines.

Private wire projects are generally easier to fund and deliver than microgrids, making them attractive to businesses with a single point of energy demand.

Choosing the right approach

The decision between a microgrid and a private wire solution hinges on the number of energy users and their specific requirements. Where multiple occupiers can benefit from shared infrastructure, a microgrid may be the more appropriate option. However, if only one user stands to gain, a direct wire connection is more efficient and cost-effective. Microgrids are often considered in locations where there are grid constraints, where limited power capacity can be managed and distributed more effectively across a site. 

As the drive towards net zero accelerates, and with energy pricing likely to remain volatile, both microgrids and private wire renewables will play a vital role in reshaping the UK’s energy landscape. Understanding their differences and assessing site-specific needs early is essential to selecting the right solution and unlocking long-term value for each user case.

Further information

Contact Joe Lloyd or Thomas McMillan

Unlocking the power of private wire: A smarter path to renewable energy