As electricity demand accelerates across industry, buildings, transport and AI, Layton Hill, Vice President of Strategy for the United Kingdom & Ireland at Schneider Electric, argues that the UK must move faster to modernise its infrastructure and make every watt count – and that owners and developers need a practical response while grid access remains constrained.
The IEA forecasts that electricity consumption will grow at around 4% per year through to 2027. This will be driven by industrial growth, the expansion of data centres and the triple whammy of urbanisation, digitisation and decarbonisation. As a result, consumption is expected to skyrocket over the coming decades. Which begs the question: is the UK ready to meet this demand? In my opinion, not yet.
Before we get to solutions, let’s put the electrification story into context. Over the past decade, electricity’s share in total energy demand has increased, but only by around 2% to around 20% of the total energy mix. What’s interesting about the next decade is that electricity demand will keep growing while overall energy demand ‘runs flat’, according to the IEA. There will be a decoupling. What this means is that the share of electricity – and therefore electrification – is going to increase in the mix going forward. That’s new, and it matters.
Where’s the growth coming from? Sources linked to regular economic expansion represent around half the growth, such as new industrial facilities, new buildings and more infrastructure for public transportation. All of this creates demand for more electricity, because modern economies rely on it. Then the other half comes from developments that come on top of natural economic expansion, like data centres, AI and other emerging services. Research shows AI-driven technologies could increase Europe’s electricity demand by up to 20% over the next decade.
Then there is existing energy usage going electric. There are the big-ticket items like mobility – electric mobility – which is growing fast: a 23% increase last year. Then there are other electrification patterns too, like buildings switching away from fossil fuel heating to electric HVAC systems.
Yes, that adds up to 150%. And no, it’s not a mistake – that’s the point. This shift won’t be gradual or predictable. It will come from everywhere: the usual suspects, the wild cards, emerging markets and areas we’re not expecting – and all at once.
The disconnect between capacity and demand
However, as electrification accelerates, the availability of grid infrastructure will become a bottleneck. The faster we grow as a society, the more technology develops, and the sharper the shortage. For businesses eager to invest and expand, that means access to power becomes a delivery risk, not just a utility issue. Renewables can take a long time to be connected to the grid – up to 15 years in the UK – and this needs to be accelerated to meet demand, so that UK businesses can grow through cheaper access to cleaner energy.
That disconnect between business readiness and available infrastructure will define the years ahead.
With electricity demand rising, electricity prices are likely to rise too, because the infrastructure will require much more investment and because of additional competition for capacity. Naturally, businesses will be negotiating for greater access, if they’ve done all the efficiency savings they can. It’s no coincidence that the most prepared players have been thinking this way for years, partnering with those who can help, through digitalisation and smarter systems, to make every watt count.
Distributed energy provides part of the answer
Without access to the infrastructure, how can businesses build some of the capacity they need for their own use? This is where distributed energy solutions, like rooftop solar, come into play. Not only can these technologies be ramped up much faster than larger infrastructure projects, they’re also relatively easy to deploy.
Although there have been some challenges along the way. Historically, wind energy projects in the UK and Europe faced lengthy delays for grid connections and planning permissions. Fortunately, attitudes are changing, with planning approvals for wind, battery storage and solar projects in the UK almost doubling in the past year.
So, the appetite is there, and while we need to continue developing large-scale infrastructure, for me, part of the answer lies in distributed energy – in both buildings and industry. Many of these solutions are already viable and being used, but they’re generally underleveraged. In the US, there’s a clearer understanding that distributed energy is viable, but in the UK and Europe, it’s less developed.
For owners and developers, that means treating on-site generation, storage, controls and efficiency as part of the capacity strategy, not as an optional add-on. Pretty soon, distributed won’t just be a nice-to-have; it will be a necessity.
From narrative to action
The other lever for tackling both grid limitations and rising prices is how organisations frame electrification internally. We talk a lot about electrification to decarbonise, but something equally important is often missed: electrification to modernise. Much of the industrial footprint in the UK and Europe is old. A lot of industrial processes still rely on fossil fuels and haven’t changed much in 50 years. Electricity is undeniably the energy of modernity – but that alone will not solve delivery constraints.
The blackouts in Spain and Portugal were a warning – a glimpse of what happens when electrification moves faster than the grid. Closer to home, the shutdown at Heathrow airport was the result of a fire at a nearby electricity substation.
But these events also highlight an opportunity: a future where rooftop solar, on-site batteries and a more up-to-date grid don’t just keep the lights on, but modernise how we generate and use power. For businesses, the practical response is to reduce avoidable demand, improve visibility of loads, and look at on-site resilience where it stacks up. These systems can build resilience, cut strain on the grid and help projects move when connection upgrades are slow.
As economies modernise, they naturally decarbonise. Mobility improves – with better cars, fewer cars and more alternatives. Buildings become more efficient, better insulated, and powered by distributed energy. As access expands and costs fall, economies don’t just modernise – they electrify and digitise. Infrastructure gets smarter and industry gets cleaner, driving down emissions. A recent study shows that Europe can save €250 billion per year by 2040 through accelerated electrification.
Keeping energy projections in line with electrification
Most political projections assume the next 40 years will look much like today: a growing population, a bigger economy, slightly more energy use. That’s not how change works. The only area where this shift is starting to register is with data centres, AI and related technologies. People are beginning to realise that something big is emerging. But no one knows how big.
Businesses often make projections about how these changes might unfold. Back in 2021, we developed a set of scenarios that already leaned heavily into electrification. But looking at the pace of change today, it’s clear the future is arriving faster, and with more complexity, than most models anticipated. That’s not a failure of foresight, but a sign of just how rapidly the fundamentals are shifting.
