Electricity network capacity: Constraints and collaboration

Developers may not yet be fully impacted by the Future Homes Standard but growing pains are already being felt in the industry, writes Mathew Capper of Brookbanks. Here’s what you need to know to be ready to meet the electricity-hungry demands of the future.

The Future Homes Standard goes into effect in 2025. In response to this looming deadline, there have been many articles written identifying impending problems with capacity in the electrical network and warning that the ability to connect a development could soon become a deciding factor in when a new project can be delivered.

For developers, who may apply for a new electrical connection only a few times a year, the problem may not appear to have had an impact yet.  However, for those of us who seek new connections multiple times a week on behalf of our clients, it is apparent that it is a current problem and impacting sites already, two years ahead of the Future Homes Standards’ arrival.

At Brookbanks, we specialise in finding innovative technical solutions to help landowners, strategic lad promoters, and developers unlock challenging developments. As of late, this has meant trying to negotiate grid connections.

What’s the issue?

As a result of the switch to low-carbon (usually electric) heating solutions, capacity requirements on housing sites have roughly doubled, driving a significant increase in the amount of electrical infrastructure required to connect a development.

Potentially more of a problem is the significant increase in the time it takes for the network operator to connect a development to its existing network, which can now take several years, and in some circumstances even longer.

It is no surprise then, that we are being asked to confirm that sites can be connected to the electricity network earlier and earlier in projects, with planning officers beginning to ask for evidence of the availability of electrical capacity when reviewing whether sites should be allocated in local plans.

Across large areas of England and Wales, the transmission and distribution electricity networks from 33,000V and upwards are heavily constrained and in recent exercises for clients, where we have been asked to identify areas where it may be favourable to make large demand connections, the list of potential options have been very, very short.

Progress is being made

Despite all this, there are reasons for optimism. In April 2023, OFGEM brought into action the snappily titled ‘Access and Forward-Looking Charges Significant Code Review’, or Access SCR for short, which sought to remove the link between customer connections and network reinforcement, allowing network operators to fund network reinforcement rather than requiring a connection project to cover the cost of the works.

This both reduced the cost burden on developers for network improvements but also allowed network operators to take control of network upgrades.

Some of the more forward-thinking network operators are now working collaboratively with developers and their consultants to take control of the delivery (and cost) of new infrastructure, such as primary substations, to ensure that they can meet the demands of forthcoming large development projects.

In doing so, they are effectively allowing an oversubscription on their existing network, with the knowledge that many developments will never fully utilise the electrical capacity that they request, to delay the requirement for some larger infrastructure projects. This approach is helping to unlock developments that would otherwise have been delayed by lengthy reinforcement works.

Early engagement is often the answer to many construction challenges, and network capacity issues are no different.

Early identification of network constraints allows developers to factor costs and timescales into development appraisals and allows network operators early visibility of forthcoming developments, giving them more time to plan, fund, and deliver network reinforcement works.

Issues to ponder

A couple of key considerations should be:

• Correct calculation of demand – accurately identify how much electrical capacity you need for your site. Normal M&E-based calculations do not apply to electricity network demand assessments for residential development and a lot of sites suffer from inflated demand calculations.
• How to engage with the DNO – there are various avenues to investigating network capacity including connections surgeries, feasibility studies, budget quotes, and points of connection Understanding the right time to use each of these options is key to successful capacity acquisition.
• Securing capacity is a balancing act – securing too early may mean your offer is retracted, and securing too late may leave you without capacity.
• The right heating solution – could district heating or smart micro grid solutions be implemented to reduce maximum demand?
• If in doubt engage a utility consultancy!

While this approach may not help all sites, it should help to plug the 5-10-year gap before some of the larger reinforcement projects are delivered and the benefits of Access SCR really start to kick in.

• Mathew Capper is the director of utilities at Brookbanks