Grid issues obscure UK industrial success - new report

Grid connection challenges have the potential to become a major obstacle to growth according to new research. Companies canvassed for the report Powering 2030: Can Great Britain’s Infrastructure Support Industrial Growth and Net Zero? say grid delays have halted their growth.

However, the UK’s industrial sector is broadly optimistic, with 28% of organisations expecting to expand by 26% to 50% within the next three years.  60% of senior industrial decision makers who have experienced connection delays reported a direct business impact, with a further 34% stating they stopped growth altogether.

The findings uncover a significant disconnect between expectation and reality, with directors anticipating grid connections taking 3.2 years on average - when the realistic timeframe for a major project is closer to eight.

The research, commissioned by independent, specialist grid consultancy Roadnight Taylor, surveyed 200 senior industrial decision-makers across Great Britain.

It discovered that connection challenges are delaying new projects for one third (33%) of businesses, increasing costs for 32% and obstructing energy transition plans for a quarter (25%).

With the UK’s focus heavily pinned on net zero and many companies looking to electrification, grid challenges are not just a commercial problem, they risk directly delaying national decarbonisation.

Hugh Taylor, CEO at Roadnight Taylor, said: “The ambition across British industry is clear and encouraging. What concerns us most is not the directors who have experienced the challenges, it is those who do not yet know what they are walking into, and who will not plan for it.

“The ‘awareness gap’ this report reveals is significant, and the consequences of underestimating grid connection complexity can be severe. Expecting a grid connection in 3.2 years when the realistic timeframe for a major project is closer to eight is not just an inconvenience - it can fundamentally reshape project viability, financing and commercial timelines. The earlier organisations engage with this reality, the better placed they will be.”

While three quarters (74%) of directors believe that the National Energy System Operator’s (NESO) ongoing Connections Reform will benefit their organisations, 72% still think the UK risks being left behind as the world enters a net-zero-based industrial age.

Directors cite greater financial incentives for low-carbon fuel deployment, stronger long-term policy certainty for industrial investment, and enhanced investment in energy transition infrastructure as being crucial to unlock the UK’s industrial potential.

Taylor said that the reforms being progressed by NESO and Ofgem - including the emerging Demand Connection Reform framework - are meaningful and highly encouraging steps.

“But organisations like those surveyed in this research cannot wait for a perfect infrastructure landscape before making decisions. It’s crucial that directors begin to treat grid connection as a strategic question from the outset, instead of a late-stage technical detail.”

The reports conclusions chime with anecdotal comments made by delegates registering for the GRID-UK conference at Excel, London in October.

“GRID-UK is focusing on how the huge national investment in the electricity transmission and distribution will drive economic growth across the country. There is no doubt the issues of high energy costs and connections reform are uppermost in their minds”, said GRID-UK’s Content Director, Martin Venning, who pointed to the conclusions of two similar reports as evidence of shared concerns.

One from the employers organisation, MAKE UK predicts an imminent £85bn economic loss for the country resulting in a 13% decline in manufacturing capacity unless urgent action is taken to remove policy levies from electricity bills and fund them through general taxation ,to provide immediate price relief for 130,000 ‘at risk’ supply chain SMEs.

Another from Mace Construct claims workforce turnover in the UK construction industry is costing the country £1.3bn every year through lost productivity, with large schemes in the UK’s infrastructure pipeline, from housing and schools to energy projects, being delayed and made more expensive by rapid workforce churn in construction,

Based on data from more than 200 projects, Mace Construct’s report shows that when workers leave large sites, projects lose knowledge, coordination and output.