The UK’s electricity grid is a problem. It has been underinvested in for decades, leaving it low on capacity and poorly designed to accommodate the rapid rollout of new renewable energy generation.
Congestion on the grid means billions of pounds spent on curtailment. For the uninitiated, that refers to those headlines you’ve seen about wind farms being paid millions of pounds to switch off – although as it happens, between two thirds and around three quarters of total constraint and curtailment costs go to gas-fired power plants, which are paid to ramp up in place of constrained wind power when transmission bottlenecks prevent it from being able to flow where it needs to go.[1]
This is not something of which policymakers are unaware. There are a plethora of related programmes underway, helmed variously by the government, the regulator (Ofgem), and the National Energy System Operator (NESO). In fact, there are so many processes underway – Connections Reform; the Reformed National Pricing (RNP) delivery plan; the Strategic Spatial Energy Plan (SSEP); Regional Energy Strategic Plans (RESPs) – that even sector experts will sometimes confess to being a unsure how exactly all of these things are going to hang together when they reach completion. [2][3][4][5]
If sector experts will admit to being unsure, it’s nothing on politicians who have little background in the energy sector. Faced with an impenetrable wall of acronyms, it can be challenging to hold their attention and make the case for change. And change is needed – while grid reinforcement is underway, and plans for system improvement are progressing, it is unavoidable that we need to go further and faster.
Our creaking grid infrastructure is the source of a much wider and more disparate range of policy challenges than curtailment costs. It functions as a bind on decarbonisation, industrial strategy, economic growth, electrification, housing, national security, digital infrastructure and regional development.
The housing theory of everything is an idea popularised by a 2021 article in Works in Progress magazine, which posits that the scarcity of affordable housing in economically productive cities is a root cause or contributor to multiple other social and political challenges, from low productivity to climate change.[6]
In a similar way, the insufficiencies of the UK’s existing grid infrastructure beget and compound a wide range of national political challenges. If the government is to achieve a swathe of its most ambitious policy objectives – from net zero targets, to housebuilding, to reindustrialisation – we need to do something about the grid.
Miles travelled, miles still to go
The government can announce plans to drive up productivity, create new investment zones, and reindustrialize the UK region by region. None of it will matter if projects and firms that are fully financed and ready to proceed cannot access guaranteed, timely grid connections.
NESO’s Connections Reform process has cleared out around 300 GW of capacity from the grid connection queue. This was made up of so-called ‘zombie projects’. Despite being speculative, unfunded or otherwise unviable, until recently they still held spaces in the queue, delaying the connection of shovel-ready projects by up to 15 years.[7]
The replacement of the old, ‘first come, first served’ system with a ‘first ready and needed, first connected’ system was a necessary step (the catchily-named TMO4+ regulatory reform package, in case you were desperate for another acronym). But the fact remains that the picture on the ground is still fraught. Grid connection capacity for new generation projects is effectively all allocated through 2035. Large energy users still face prolonged delays, which create uncertainty that can drive up project costs and put their financing at risk. This is not only an issue for the likes of data centres – it is holding up the delivery of new housing, too, and creating yet another barrier to achieving the government’s ambitious housebuilding targets.[8]
In a similar way, the government can talk about the need to decarbonise ‘hard-to-green’ sectors like transport and heating – but without the means to electrify those sectors at pace and scale, it is a challenge we will fail to meet.
As well as being vital for decarbonising our economy, electrification has an important role to play in boosting UK competitiveness and bolstering energy security.[9] The government has rightly made the case that in a decarbonised system based on a bedrock of home grown renewable energy generation, the UK will be less exposed to global fossil fuel price shocks – which, in a period of geopolitical instability that looks unlikely to abate soon, are likely to remain a significant ongoing risk.
Electrifying more of our economy would have a positive impact on prices in more direct ways, too – driving up demand enables built-in system costs to be distributed over more MWh of consumption, meaning unit prices decrease.[10]
However, UK grid capacity shortages delay electrification, because without reinforcements to legacy infrastructure, electrification at pace and scale would exceed the physical limits of the grid.
This problem extends further than domestic consumers, although clearly, decarbonising domestic heating at scale and accelerating the EV rollout are both essential. If the government is to deliver on Andy Burnham’s promises of reindustrialisation, then it is unavoidable that intensive industrial energy users will need to connect to the grid in locations not primarily or exclusively governed by where it is easiest for them to get a grid connection. While it is early days, the scale of the government’s ambition to reindustrialise post-industrial areas of the country appears to be an animating force behind what we can glean of its over-arching programme. I doubt that No 10 will be eager to reduce the scale of this ambition for the sake of grid capacity management, which begs the question of what they can do instead.
Update the map and increase momentum
The first thing that needs to happen is the development of a clearer framework for how all of the ongoing programmes to make grid connections planning more strategic and better streamlined will interact with one another as they continue to progress through their various stages. Industry and investors need to know what will be guidance, and what will be mandatory. While we know the timeline for the publication of the first SSEP (Autumn 2027), it will be important for the government to update industry on its thinking in the interim at key stages, to best enable forward planning.
The second thing that needs to happen is the acceleration of key grid reinforcement in areas of particularly high constraint, such as Scotland and East Anglia. Accelerating specific, targeted grid upgrades in a few key areas could make a significant impact in reducing grid constraints, research from LCP Delta published earlier this year has shown.[11]
One example of this is that wind power in East Anglia is a key driver on constraints to 2030, significantly contributing to NESO’s forecasted £7.2bn constraints costs. According to LCEP Delta, accelerating network reinforcement in this area would result in the largest single year reduction in constraint costs between 2025-2035. National Grid reports that the Norwich to Tilbury line will cost approximately £900m, and if accelerated by one year, it could save £2.8bn in constraints costs in 2030 alone.
Accelerating major projects like these has its own challenges – from supply chain constraints and labour shortages to local objections to new pylons. But the government is serious about delivery on housing, reindustrialisation, electrification and more, then this is where it needs to start directing more energy. If we unlock grid, we unlock progress.
Imogen Shaw is Climate and Energy Programme Manager at the Labour Climate and Environment Forum.
[1] https://www.renewableuk.com/news-and-resources/blog/an-overview-of-constraint-payments/
[2] https://www.neso.energy/industry-information/connections-reform
[3] https://www.gov.uk/government/publications/reformed-national-pricing-rnp-delivery-plan
[4] https://www.neso.energy/what-we-do/strategic-planning/strategic-spatial-energy-planning-ssep
[5] https://www.ofgem.gov.uk/decision/regional-energy-strategic-plan-policy-framework-decision
[6] https://worksinprogress.co/issue/the-housing-theory-of-everything/
[7] https://www.theguardian.com/business/2025/dec/08/zombie-electricity-projects-britain-face-axe-grid-connections-net-zero
[8] https://aurora-utilities.co.uk/planning-without-power-how-grid-constraints-will-stall-britains-growth/
[9] https://powering-up-business-poll.com
[10] https://britishprogress.org/reports/speeding-up-grid-connections-to-lower-bills-and-de#Don’t-forget-the-demand-side:-the-impact-of-losing-focus-on-demand-connections
[11] https://insights.lcp.com/rs/032-PAO-331/images/LCP-Delta-Reformed-National-Pricing-Measures-on-GB-Grid-Constraint-Costs-March-2026.pdf?utm_campaign=Reformed-national-pricing-GB-grid&utm_medium=bitly&utm_source=website