No one doubts the principle that the National Grid has to rework a transmission system that was designed for a different century and a different energy generation map, writes Charles Hardcastle, Partner, Head of Energy & Marine, Carter Jonas.
Power no longer radiates out from coal clusters in the Midlands and Yorkshire: increasingly is generated offshore or comes from coastal nuclear power stations. Furthermore, the most pressing need for power is in the areas furthest from its sources.
The Great Grid Upgrade is the opportunity to address this challenge. Seventeen major projects – the spines, reinforcements and new links – are intended to move low-carbon electricity from the location of source to use and to stop the system paying to waste clean generation.
While the principle is indisputable, it is the timing that is causing significant problems, impacting on everything from meeting housing targets to getting ahead in the emerging data economy. Programme delay changes investment cases, breaks delivery sequences and risks forcing knee-jerk reactions.
The credibility gap in connections as a financial risk
A grid programme can be delayed and still succeed if the market trusts the revised timetable, but trust is now being tested.
In early February 2026, Ofgem published an Update on delays to connection dates which was unusually blunt by regulatory standards: it stated that it is “frustrated and disappointed” that NESO and transmission owners could not meet existing connection dates and connection points for all projects that qualified for “protected” dates. Of 340 protected transmission projects, 210 are expected to have their connection date and or point changed. This comes on the back of slippage in the connections reform timetable from NESO in late January.
The market was expecting clarity around Gate 2 offers and instead got partial visibility, revised assumptions and more uncertainty about what is genuinely protected. For developers and funders, a moving grid date is unpriceable risk and this significant challenge was exacerbated by the fact that it came late in the programme, after consent costs had been incurred and land options had been exercised.
While we now have an updated timeline for developers to receive connection offer dates, with 2026/2027 connected projects scheduled by the end of May 2026, there will be lingering concern as to whether this latest timeline will be met.
How this spills into development of all types
Because we advise on consents and land rights, we see the chain reaction. A delayed connection can trigger planning expiry risk, re-phasing and fresh conditions, land deals wobble, financing is paused and contractors re-price.
In London, the constraint is having a significant impact on the delivery of much needed housing. The Greater London Authority’s West London Electrical Capacity Constraints paper sets out how capacity constraints have led to connection waits of many years. Four years after the publication of the document there is little sign of the situation easing.
More recently, the London Assembly documented the impact on housing delivery: Gridlocked: how planning can ease London’s electricity constraints demonstrates the extent of schemes with significant connection delays and others pushed through only via mitigation measures and “ramping” approaches.
At a national level, the system is also paying for constraint. A parliamentary answer from 2024 puts 2023 constraint costs at £1.4bn, with around 12 TWh of balancing services used to manage constraints.
Then there is demand growth. Ofgem’s own demand connections update shows contracted demand offers jumping from 41 GW in November 2024 to 125 GW by June 2025 due to data centres accounting for a significant share of that growth. A National Grid DSO impact study cites 2.4 GW of grid-connected data centre capacity in 2024 and estimated consumption of 7.6 TWh, about 2% of Great Britain electricity demand.
Combine a growing queue with delayed reinforcement, and it’s clear why the debate has moved from “how fast can we connect renewables?” to “how do we keep the wider economy moving?”.
Private wire and co-location
So if access to a grid connection cannot be relied on, what are the alternatives?
An increasingly common workaround is to bring demand to generation and connect them directly. A private wire arrangement between a solar farm and a large load can de-risk both sides: the generator gets a bankable offtake and the customer gets direct access to energy. This is a particularly apt solution for data centres and energy parks with high base loads However, appeal can be limited as many customers still need grid back-up and export routes.
On-site generation
For some developments, behind-the-meter generation is moving from an option to a necessity given rising imported energy costs. Where demand profiles can match the generation output (often with the addition of batter storage), the business case and pay back periods have never been as strong and there remains high demand from investors willing to fund own and operate systems where landlords or tenants don’t grasp the opportunity.
Flexible and staged connections
It is necessary to take into account that not every scheme needs capacity on day one. Flexible connections and staged energisation – where loads come on in phases and operate within agreed limits – can turn an impossible connection into a workable one. The commercial challenge is that many investors still treat “non-firm” as second-class, so the industry needs clearer standards on what flexibility products mean in practice and how they are enforced.
Demand shaping and operational flexibility
The least popular option is often the most available: designing demand that can adapt according to need. Data centres, logistics and some industrial processes can use smart load management, interruptible contracts and on-site storage to reduce peak requirements. While this may be seen as accepting the unreliability of the current situation, it is necessary if it means that a project can start trading sooner, albeit with a smaller connection.
Use of temporary power
Some projects will keep turning to temporary generation to bridge gaps. In practice that often means diesel or gas. While it keeps projects alive, it collides with emissions goals and local air quality expectations. If this is used, it should be a defined short bridge with a declared end date, not a shadow strategy that becomes permanent through inertia.
Location and phasing choices that acknowledge physics
Some demand may have to move to where capacity exists. We can already see parts of the data centre market shifting north because the south is constrained. While there is considerable logic behind this, the risk is that it becomes unmanaged behaviour, with demand clustering in places faster than networks can serve, simply relocating the bottleneck. With the demand connection queue now surpassing 100GW, primarily made up of Data Centre connections, this has the potential to become a significant issue in a relatively short timeframe.
Conclusion
As with so many logical predicaments, there is not one single answer but a need for a mixed approach.
Clearly the connections process needs fewer cliff edges. If “protected” does not mean protected, the market will price that as risk, resulting in increased costs.
There is also a clear need for planning, networks and investment to coincide. The Great Grid Upgrade is physical infrastructure delivered through a consenting environment that is crowded, local and emotionally charged. This means the programme lives or dies on early land strategy, consistent stakeholder engagement and a delivery timetable free of slippages.
Finally, we should treat private wire and local energy systems as part of national resilience, not as fringe workarounds. That requires clearer policy, clearer commercial templates and a more mature view of flexibility. It also demands honesty: private solutions still depend on the public system for balancing, back-up and ultimately national optimisation.
I remain convinced that Great Grid Upgrade is the right solution. But in the next two years it will be judged less by ambition and more by whether we can restore confidence in connection dates and give developers practical routes to energise sites without taking considerable risks on an ever-changing timetable.
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