Demand for schemes putting pressure on need to power them

Competition for electricity needs and connectivity is meaning more and more projects are being delayed, according to a new report from Turner & Townsend.

The firm is advising clients to focus on anticipating the impacts of a lengthening “connection queue” amid “soaring demand” for energy from across the built environment and the transport sector.

Chris Trew, director of T&T Alinea, said: “Significant work is being done to boost the UK’s generation capacity and improve its transmission network, but the availability of power connections can still vary greatly by region.

“The availability map is dynamic too, it’s seldom as simple as ‘build here and you’ll get a connection quickly’.”

T&T’s summer 2025 UK Construction Market Intelligence report predicts infrastructure tender values will rise at a faster pace than real estate in the coming years, partly due to rising demand in the context of the government’s long-term infrastructure strategy and investment in the expansion of the national power grid.

It highlights the pressure on the 90-year-old National Grid, which transports current to where it’s needed, pointing out that between Q1 2024 and Q1 2025, domestic electricity consumption rose by 2% as more properties switched from gas boilers to heat pumps.

Additional demand is expected to come from a wave of new data centres, with data centre and warehouse construction both growing rapidly to meet the need for cloud services and artificial intelligence (AI).

Infrastructure-specific growth has more than doubled (up by 127.8%) in the last year, putting additional pressure on the need to improve the grid network to power it. The National Grid’s connections assistant tool shows that most new applicants will receive connection dates in 2036 or later.

Electricity connections are becoming major considerations in project viability. T&T says council leaders report that real estate development in areas including West London, Oxfordshire, Milton Keynes, Swindon and Cambridge is being hampered by insufficient energy capacity in their regional grids, forcing developers to endure long waits for their schemes to be connected.

It expects real estate tender price inflation will increase from 3% in 2025 to 3.5% in 2026. While infrastructure inflation is predicted to stay at the higher rate of 4.5% in 2025 and rise to 5% over the next three years.

National Grid estimates that by 2050 the UK’s data demand will use nearly as much energy as all Britain’s industrial users consume today.

T&T’s report found that material costs remain largely stable, and other inflationary factors such as the rising costs of employer National Insurance contributions have been partially offset by the overall softening of construction demand.

 

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