Hoare Lea has called on developers of energy-intensive sites to look beyond the traditional grid connection process, arguing that private wire networks could offer a route around years-long delays.
In a new report, Jumping the big energy queue, the engineering consultancy claims that private wire networks now make economic sense for some large energy users, particularly as National Grid connection delays continue to disrupt project timelines and investment decisions.
According to the firm, delays of up to a decade are already affecting capital expenditure planning and procurement across sectors including heavy industry, data centres, logistics, transport infrastructure, and science and research facilities.
That is a significant problem for developers already under pressure to electrify operations, reduce emissions and bring new facilities online quickly. Waiting years for a grid connection is not exactly conducive to hitting net zero targets, or indeed keeping investors happy.
The report argues that many developers may not realise they can own, operate and adopt their own power supply-side system, or bring in investors willing to own energy assets on their behalf. These private wire networks can connect a business directly to a nearby renewable energy source, or to on-site generation, using a dedicated circuit rather than relying solely on power supplied through the National Grid.
In practice, that could allow a development to require a smaller grid connection, or provide a way to unlock a delayed connection by bridging the gap between supply and demand in the short term.
A commercial edge?
Hoare Lea also argues that private wire networks could offer a commercial advantage to large energy users by reducing energy bills and giving businesses greater control over their carbon emissions.
That could be particularly attractive to sectors such as data centres and industrial manufacturing, where power availability, price certainty and carbon reporting are becoming increasingly central to site selection.
Of course, private wire networks will not be suitable for every project. They require access to generation, the right legal and commercial structure, and enough demand to justify the investment. But with the grid queue now one of the defining constraints on UK infrastructure delivery, it is not difficult to see why developers are beginning to look for alternative routes.
Laurence Johnson, Principal of the Utility & Energy Infrastructure Group, Hoare Lea, commented, “Right now, the energy market conditions are perfect to find the right mix that directly matches the power generation and demand profile for a business with high energy needs. If developers are brave, there could be a whole market of products here wrapped up in a 30-year investable concept – great for banks and others, with a guaranteed rate of return.”
