Turner & Townsend is advising clients to focus attention on navigating the impacts of a lengthening ‘connection queue’, as growing infrastructure and commercial demand is driving electricity grid reform to improve connections.
The global professional services company’s Summer 2025 UK Construction Market Intelligence report (UKMI), predicts infrastructure tender values will rise at a faster pace than real estate in the coming years. This is partly due to rising demand in the context of the government’s long-term infrastructure strategy and investment in the expansion of the national power grid.
Real estate tender price inflation (TPI) is expected to increase from 3.0% in 2025 to 3.5% in 2026. Infrastructure inflation is predicted to stay at the higher rate of 4.5% in 2025, and rise to 5.0% over the next three years.
Material costs remain largely stable, and other inflationary factors such as the rising costs of employer national insurance contributions have been partially offset by the overall softening of construction demand. Construction was the slowest growing sector of the UK economy in the first quarter of 2025, and total construction output stagnated in this period – ending three consecutive quarters of growth as activity across real estate softened. Infrastructure-specific growth, however, experienced a significant jump – with new orders more than doubling (up by 127.8%).
Linked to this growth is the renewed emphasis on improving the grid network to power the new homes, hospitals, infrastructure, advanced manufacturing, and data centres being built. Recent soaring demand for connections has put the grid under significant pressure, with backlogs leading to long wait times. National Grid’s own connections assistant tool shows that most new applicants will receive connection dates in 2036 or later.
Due to this, electricity connections are now often major considerations in project viability, on par with planning and funding. The delays are one element creating market uncertainty, which must be carefully managed to avoid cost pressure as construction firms could otherwise look to ‘price in’ the increased risk.
Given the scale of this challenge, Turner & Townsend is calling on clients to prioritise power connections in their programmes early. It is also advising businesses to consider approaches to mitigate the impacts of competition and get connected sooner. These include ‘ramping up’ by using temporary, lower capacity connections at early dates, developing on brownfield land with existing cables, or exploring on-site power generation with flexible connections which allow excess energy to be exported to the grid. In all cases it is vital to maintain strong dialogues with distribution network operators and stay engaged in the process.
James Darrie, Scotland Strategic Lead at Turner & Townsend, said: "Scotland is at the forefront of the UK’s energy transition, with ambitious targets for renewables and net zero. But the growing strain on the electricity grid is a real challenge for delivering the infrastructure needed to meet these goals.
“In Scotland, where many major projects are in remote or rural areas, early engagement on power connections is absolutely critical. We’re working closely with clients to navigate these pressures, whether that’s through phased connections, on-site generation, or leveraging existing infrastructure to ensure that Scotland’s ambitions are not held back by grid constraints.”