Housing development in England under threat as electricity capacity nears limits

New housing development in London and the south-east of England is at risk as electricity networks near capacity and upgrades are stalled, according to experts, despite the UK government forecasting increased demand for power almost a decade ago.

Electricity demand has fallen in recent years as homes have become more efficient, but it is forecast to rise as drivers adopt electric vehicles and homeowners install heat pumps, placing additional demands on local networks. 

Three boroughs in west London have paused development because there is at present no spare capacity for new connections to the electricity grid until 2035, the Financial Times reported on Thursday.

Experts on Friday warned the problem could spread as national efforts to hit net zero carbon emissions boost electricity consumption, unless networks are quickly upgraded to withstand extra demand.

“The truth is, the overall electricity system is creaking a bit,” said Guy Newey, formerly energy adviser to two Conservative business secretaries and now boss of Energy Systems Catapult, an independent research centre. 

Warning that power outages were likely without upgrades, he added: “If we’re serious about net zero targets we have to build ahead of need, otherwise you’ll keep getting stories like west London.”

In Hillingdon, Ealing and Hounslow, the network has come under strain far faster than expected because a series of data centres, which can consume as much energy as thousands of homes, have been connected.

According to the Energy Networks Association, which represents network operators, the volume of new requests for connections from data centres in the past two years alone has equalled the entire area’s electricity demand.

That made west London unique, said a senior employee at one distribution network operator, adding that although development elsewhere was “not a today problem . . . it’s fair to say this is a bit of a wake-up call”.

Local networks in affluent areas are most at risk because demand for new EVs and heat pumps is highest there, according to Adam Bell, head of policy at the consultancy Stonehaven and formerly head of energy strategy at the Department for Business, Energy and Industrial Strategy.

“Everyone has known this has been coming for a very long time but there has not been the political will to do anything without absolute certainty that any costs imposed will be justified,” he said.

The Department of Energy & Climate Change, now part of the business department, in 2013 published a report that warned of “the impact on the electricity network of large numbers of electric heat pumps” in the context of decarbonising the heating system.

But nine years on, experts say the grid remains unprepared for the widescale electrification that is set to enable decarbonisation.

Distribution network operators, which own and operate the power lines required to run electricity from the grid into homes, are responsible for upgrading infrastructure. 

But upgrades require approval from the energy regulator Ofgem — whose role is to protect consumers from excessive costs — and are signed off only when there is demonstrable new demand. 

Forecasting that demand is difficult, in part because the take-up of EVs and heat pumps is likely to vary widely across the country, management of existing demand is being refined and because the business department is delaying a decision on the role of hydrogen in domestic heating until 2026. That decision will in turn affect demand for heat pumps. 

The system of incrementally boosting distribution capacity to meet demand has historically worked, said the senior employee at a network operator. “But in an exponential growth environment we need to rethink,” he added.

The Department for Business, Energy and Industrial Strategy did not immediately respond to a request for comment.