Intense competition for UK grid connections is becoming a key threat to project delivery, according to a new report from Turner & Townsend.

In its Summer 2025 UK Construction Market Intelligence report (UKMI), it said electricity connections are now often major considerations in project viability, on a par with planning and funding. 

National Grid estimates demand for electricity is expected to increase by 50% by 2035 and double by 2050.

There is greater 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. 

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.  

Martin Sudweeks, UK managing director of cost management at Turner & Townsend, said: “The UK’s current economic landscape remains unpredictable, creating an uneasy environment for business.

“With infrastructure development at the core of the government’s ambitions for economic growth, it’s no surprise to see a significant rise in planned activity in that market.  The impacts of recent government policies and planning reforms are yet to be fully realised – however, key to successful delivery is keeping costs stable, and having a fit-for-purpose supply chain.

“This surge in demand will only add to the intense competition between construction projects, presenting a risk that costs could rise as suppliers factor uncertainty into their tender prices.” 

The global professional services company’s report 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% 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% 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%).