Can GB grid accelerate the Age of Electricity?

From megatrend to action

Over the past few weeks, I have attended roundtables on megatrends and sustainability, and it was abundantly clear that the framing around big ideas is important. With Climate Change an identified megatrend, the transmission mechanisms - ESG frameworks, disclosure requirements, ratings and commitments - were ways through which organisations initially engaged with it. Even with some of those potentially losing some momentum, the underlying trends have not changed – if anything they are accelerating, it is the narrative that has shifted. 

The focus therefore is about outcomes rather than labels. A new report from Capgemini and Sweep, based on a survey of 1,000 senior sustainability leaders across five sectors, demonstrates this view of sustainability through the lens of resilience, risk management and capital allocation rather than compliance alone.

With Capgemini finding that 94% of organisations experienced financial losses from climate-related supply chain disruption over the past 24 months, and almost three in ten reporting losses exceeding $1 million, the evidence is compounding. For property owners and occupiers, this reinforces the growing importance of resilient infrastructure, adaptation planning and supply chain security. Capital allocators and managers have been taking note with Schroders' recently announced framework to identify adaptation opportunities, and as previously highlighted the Norges Bank Investment Management's Climate Plan as just two examples.

However, as Capgemini also notes, more reporting does not automatically lead to better decisions. Despite significant growth in sustainability disclosure, 79% of respondents believe their sustainability data remains insufficient to support strategic decision-making, up from 53% in 2024. This may help explain why only around half of organisations are able to accurately assess the ROI of sustainability investments. Without robust, decision-useful data, it becomes difficult to quantify value creation and prioritise initiatives which compete for capital.

The key takeaway for me is that sustainability continues to become embedded within broader discussions around value, as the framing is increasingly focused on that. The organisations that can demonstrate how sustainability contributes to risk reduction, operational performance and long-term value creation, may be best positioned to outperform.

Electricity demand growth as power challenges remain

The other thing that crops up in many conversations is power. The National Energy System Operator's NESO's latest 10-year forecast contains several methodological changes, making direct comparisons with previous editions difficult. However, the key message remains that electrification continues to drive a substantial increase in power requirements across the economy, with growing implications for property, infrastructure and investment.

Headline electricity demand growth has moderated slightly, NESO forecasts a 2025-2030 compound annual growth rate (CAGR) of 2%, compared with 2.2% in last year's outlook. However, as this is a forecast based on the pipeline and connection queue, it could be read as due to longer times to connect and reinforcement rather than a slowing adoption, as well as a recalibration. The demand growth remains broad based, with residential demand expected to grow faster than previously anticipated, as well as continued growth across industrial and commercial sectors (see figure below).

The most significant revision concerns data centres. Earlier forecasts relied heavily on projected capacity seeking or holding grid connections, which likely overstated near-term electricity consumption. The updated methodology incorporates observed demand and utilisation rates, reducing estimated data centre electricity demand from 8.1 TWh to 4.6 TWh in 2025. This aligns with the Government's 2026 analysis of 'Data centre electricity consumption in Great Britain' and subsequent clarifications provided by NESO to Parliament.

This is a recalibration in methodology, not a reflection of lower demand. In addition, increasing use of private-wire networks, on-site generation and behind-the-meter energy solutions means a growing proportion of electricity consumption may sit outside traditional grid-based forecasts. In other words, the forecast may provide a more precise picture of grid demand without fully capturing total energy demand. That distinction matters because power availability is increasingly becoming a competitive factor for real estate. While electricity demand forecasts have been revised lower, NESO still expects connected data centre capacity to increase from 2GW in 2025 to 6GW by 2030 and almost 8.5GW by 2035. this is broadly inline with Knight Frank projections of CAGR of 30% over the next five years. The underlying growth story remains intact.

The Age of Electricity arrives

In tandem with NESO’s updated forecast the IEA released an analysis on electrification moving from an environmental objective to an economic one. Electricity already accounts for 23% of global final energy consumption, but the agency estimates this could rise to 33-35% by 2035 if cost-effective electrification opportunities are fully realised. This is likely to be a pledge pursued by COP31 hosts Turkey who, alongside Australia, requested the IEA research. The message of resilience was reinforced by new JP Morgan research titled The Race to Resilience: Balancing the energy security equation.

The significance for real estate is substantial. Data centres, logistics facilities and advanced manufacturing could emerge as structural beneficiaries of rising electrification, as pointed to in the report, while building electrification more broadly is becoming an increasingly important investment theme. In addition, UK Chancellor John Healey pledged to reindustrialise Britain, which would likely require more power.

For renewable energy and storage markets, the outlook remains compelling. Achieving a 35% electrification rate would require around 1,400 TWh of additional annual electricity demand growth through to 2035, double the past decade’s pace. Storage is a foundational part of the energy system to be deployed alongside renewables, with the IEA anticipating battery deployment increasing almost tenfold under a net-zero pathway. At the same time, UN’s outgoing secretary-general, Antoni Guterres, launched a new scheme, the Global Grids Accelerator, to help accelerate investment in electricity infrastructure across Africa and South-East Asia.

The bigger picture is that the Age of Electricity is constrained by networks, not the availability or costs of technology. The IEA estimates that grid investment will need to increase by around 40%, while JPMorgan points to growing "gridflation" pressures across key electrical equipment. In the UK, proposals for GB Grid and Ofgem's latest connections reforms (most recent consultations on Connections Experience and Data) suggest growing recognition that network capacity has become a strategic issue.

The proposals for GB Grid also confirm intent to bring forward reforms to expand and accelerate self-build connections, with the Government noting similar reforms have reduced connection times in Ireland by up to 11 months. If reforms can improve transparency and accelerate reinforcement, they could help unlock investment across real estate, advanced manufacturing, data centres and clean energy at a time when demand for electricity is rising faster than the infrastructure needed to support it. The Budget later this month will be one to watch with energy having been a key part of recent political conversations.

£511 billion - Stat of the month

Half a trillion pounds is needed to reach UK Clean Energy goals by 2040 according to a new report from Standard Life and Santander. That is roughly £40bn per annum with almost half needed to support networks, around one-fifth in offshore wind and 4-6% in onshore wind, BESS and solar. The report notes that the majority of investment will be through project finance deals and puts forward a series of recommendations to mobilise institutional capital alongside banks, including the use of credit guarantees, blended finance structures, asset aggregation vehicles, standardised financing frameworks and greater collaboration across developers, lenders, investors and public finance institutions.