The UK’s clean energy transition runs a risk of being stifled by its outdated grid connection system. Emerging sectors such as data centres, AI and renewable energy projects, from wind to solar, are being placed on the backburner due to the grid connection queue. This queue has grown tenfold over the past five years, with inactive projects creating a backlog and acting as a roadblock to the implementation of more advanced technologies.
But positive steps are being taken to address the problem. In April, the government’s Plan for Change marked a genuine turning point in the UK’s electrification story. The National Energy System Operator outlined an overhaul of grid connection rules, to kick-start the UK’s economy and simultaneously deliver energy stability and security. The government’s modern industrial strategy, introduced last year, is also set to reduce barriers to green investment, working towards policies that make it simpler and cheaper for companies to scale up and invest in the UK.
The ambition has always been there: clean energy in Britain has been a success story for a long time. Recent figures from the UK government show that £43.7 billion in private capital has already been committed to the sector. And once the reforms are in place, the government predicts it could unlock a further £40 billion in private investment each year, while avoiding tens of billions of pounds in unnecessary grid reinforcement.
These changes lay the foundations for the UK’s energy future. As Kelly Becker, President, UK & Ireland, Belgium and Netherlands at Schneider Electric, outlines: “A robust and ambitious Industrial Strategy, alongside a clear action plan for decarbonising the power system, will help the UK to regain its position as a green superpower. The UK is a hotbed for cutting-edge technology and skills, and that makes it well positioned to meet growing demand for smart energy solutions that power electrical grids.”
With a more modern and realistic grid connection system, we can bring more renewables and exciting new businesses online faster and more efficiently than ever.
Our existing businesses now need to think about how they fit into this future, not just so they can access green energy, but because they might want to generate their own and contribute to the UK’s Net Zero ambitions. Because this future remains so difficult to predict — from demand levels to the technologies that drive it — many businesses have challenging questions to answer. It’s no longer enough to plan passively and wait your turn. It’s time to get ready for when your number’s called.
Grid reform is just the start of our new Net Zero story
Grid reform or not, electrification is coming and coming fast. In 2025, 83% of UK businesses expect their energy consumption to increase. By 2035, the UK expects electricity demand to rise by 50–64%. It’s because, increasingly, sectors like transport, heating and others are shifting to electric to become more efficient and sustainable. While we know that businesses want to electrify and are making steps to do so, what the future looks for the UK is difficult to predict.
There are, however, a few things we do know. One of the most important and often overlooked is that electrification will be essential to our Net Zero journey. Renewable projects often lead the narrative of decarbonisation but actually it’s electrification that should take centre stage. Think about it like this: e-mobility brings more efficient vehicles. It also might mean there are fewer of them thanks to new transport models. Smarter buildings are better insulated, more energy efficient, and increasingly powered by distributed energy systems. Industry, too, becomes leaner, more automated, more electric, and more advanced.
When businesses think about their ESG goals, they realise this — even if it’s not the central focus of the electrification narrative.
While reforming the grid is important, the other part of the puzzle is that we need to be clever about what gets connected and where. The grid reforms are welcome, but we can’t assume that modernisation means a uniform rollout across the board. In locations where there’s a lot of competition for energy — say, a data centre hub — businesses or communities may need to explore alternative setups, like microgrids powered by on-site solar generation, due to higher energy prices or longer waits for connection.
Answers to these questions will come as smart technologies give us more visibility over grids and business operations. Analytics tools and distributed energy systems can make businesses more efficient and resilient to shocks. Businesses need to think bigger as part of this narrative. Where do you sit within the electrification story? Can you bring outdated infrastructure online now to prepare for change and build historical data? And might a prosumer model be attractive?
Efficiency must play its role
Even with the promise of cheap renewable energy through grid reform, what most don’t realise is that demand for electricity may outpace production. That leads to higher prices. The UK’s total electricity demand is projected to rise from around 300 TWh today to approximately 450 TWh by 2035 — a 50% increase. There’s a lot happening in Europe and the UK around market design, and that might manage prices in future. But there’s no guarantee, and it doesn’t instil confidence.
Here’s the point: without efficient systems, businesses won’t be able to use that energy cost-effectively. Grid reform might remove barriers to connection, but it doesn’t guarantee low prices or optimal usage.
Businesses have bigger questions to answer. Are we measuring and monitoring energy use in a way that gives us real-time visibility and actionable insights to make best use of it? How can we reduce demand through efficiency and proper asset management? Can we identify where we’re wasting energy and the ways in which we lay the foundations for our energy future?
We’re starting to see that happen. Around 32% of businesses have retrofitted buildings to improve efficiency, installing LED lighting (adopted by 55% of businesses), better insulation, and smart control systems. A further 31% have upgraded to electric vehicles (EVs) and heat pumps. Even in industry, we’re seeing electrification and digitisation. For example, in May, Schneider Electric helped ArcelorMittal, a major steel manufacturer, upgrade its Belval facility with digital sensors and software to monitor energy use and critical equipment 24/7, leading to a reduction of 170 metric tonnes of CO₂ emissions and a 20% decrease in capital costs.
The layer on top of these changes is smart tech. Proper asset assessment allows businesses to get a clear sense of their operations and determine where new assets could be installed, upgraded or replaced. It places them in a better position to manage energy costs. If you’re a prosumer - producing and consuming energy - on a distributed grid, even better.
If these grid reforms don’t manage to keep pace with demand, growth will stall. As it stands, we have heard anecdotal reports of businesses being quoted tens of millions of pounds or ten-year wait times for a grid connection. Businesses can’t afford to wait a decade to scale operations. They’ll look elsewhere.
Grid reform unlocks access to cleaner energy. Its partner in crime, efficiency, reduces overall demand. That means less pressure on the grid, lower emissions, and faster progress towards Net Zero. British businesses are already beginning to digitise their operations in order to access clean energy as efficiently as possible. Leaders are quickly recognising that these technologies are not just fundamental to reach ambitious ESG targets – they are also becoming vital to cut costs, identify efficiencies, and achieve overall energy security. British businesses can be at the forefront of the electrification story, showcasing UK industry as an attractive place for inward investment. So, it’s both a case of businesses being part of that narrative - and benefitting from it too.