Grid issues will obstruct UK industrial success - new report

Grid delays have halted their growth, say more than a third of UK companies, with new research revealing that those yet to face the challenge are dramatically underestimating what lies ahead.

However, the UK’s industrial sector is broadly optimistic about growth, with 28% of organisations expecting to expand by 26% to 50% within the next three years.

The new report, Powering 2030: Can Great Britain’s Infrastructure Support Industrial Growth and Net Zero? warns that grid connection challenges have become a serious obstacle standing between that ambition and reality.

It also notes that 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.

Furthermore, one in five (20%) feel that a lack of grid capacity will prevent the UK’s commercial and industrial sector from achieving its full potential.

The research uncovers 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.

Key figures from the report

• 34% of directors who have experienced grid connection delays say it stopped company growth altogether, yet only 8% of those without direct experience identify timescales as a significant barrier;
• 60% of directors who have faced connection challenges report direct business impact on their organisations;
• 29% believe grid connection challenges are directly posing risk to energy security;
• 72% think the UK risks being left behind as the world enters a net-zero based industrial age;
• 25% are considering locating new plants overseas, with 18% exploring relocating entire operations outside the UK.

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

It found 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%).

Threat to decarbonisation efforts

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 preventing national decarbonisation.

The data shows a clear “awareness gap” between those that have faced grid connection challenges and those that are unaware of what lies ahead. 28% of directors who have experienced grid hurdles feel connection timescales represent a significant barrier to success, compared to just 8% of those who haven’t.

Directors who are embarking on major grid connections for the first time are vastly underestimating the barriers. This gap between expectation and reality carries immense risk, with a wide range of consequences.

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Companies looking to relocate  

Energy costs are compounding the pressure. Nearly half (47%) of decision makers are concerned about energy costs and a quarter (25%) feel overseas competitors have a distinct energy cost advantage.

The consequences are already shaping strategic thinking.

A quarter (25%) of directors are considering locating new plants overseas, while 18% are exploring moving their entire operations abroad - a potential loss of investment, jobs and industrial capacity that the UK cannot afford.

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.”

Importance of grid connection

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.”

Access the report: Powering 2030: Can Great Britain’s Infrastructure Support Industrial Growth and Net Zero?