Rewiring Britain’s electricity network now costs 50% more than before Labour took power, according to updated forecasts from the National Energy System Operator (Neso), the government-owned body that manages the country’s grid. The sharp rise reflects the accelerating pace of the government’s clean-power ambitions, a surge in demand from datacentres and artificial intelligence, and the persistent drag of inflation.
From £58bn to £89bn: the new scale of investment
Neso’s initial projection for building new high-voltage transmission lines and infrastructure to connect low-carbon energy to the grid in the 2030s stood at £58bn. Its latest recommendation now calls for network investments of £89bn — an increase of more than £30bn. The operator said the revised figure was “broadly consistent” with its earlier work but had evolved to align with the UK government’s 2030 clean power action plan, an accelerated rollout of new low-carbon generation, and rising inflation.
In total, Neso has identified 43 network projects for delivery in the 2030s, 16 of which were not present in its original 2024 forecast. Among the new options is a plan to connect windfarms in the Celtic Sea at three points across south Wales and south-west England, as well as variations or updated versions of previously recommended schemes.
Why costs have surged
The 50% jump in projected spending is driven by several interconnected factors. The Labour government, which won a historic election victory two years ago on a promise to make the UK a “clean energy superpower” by 2030, brought forward by five years the previous government’s target of a virtually zero-carbon power system by 2035. To meet that goal, it set out targets to double onshore wind, triple solar power and quadruple offshore wind capacity by the end of the decade.
The accelerated policy timetable has galvanised action across the energy industry. Neso has overhauled the queue of projects waiting to connect to the grid, prioritising those that are ready to proceed and reducing delays that previously could stretch for years. At the same time, work by transmission companies to develop onshore network plans has “improved the maturity” of these projects, meaning they can be delivered sooner than originally anticipated — but at a higher upfront cost.
Rising electricity demand is another critical factor. Datacentres, essential for artificial intelligence and cloud computing, currently consume about 2.5% of Britain’s electricity, a share that is forecast to quadruple by 2030. Ofgem, the energy regulator, estimates that around 140 proposed datacentre projects are seeking grid connections with a combined demand of roughly 50 GW — more than the country’s current peak electricity demand. By the end of the decade, datacentres could represent 8–10% of national electricity demand. The electrification of transport and heating is also adding to the pressure on the network.
Inflation has further inflated the cost estimates. The UK consistently pays more for infrastructure projects than comparable countries, with potential annual savings of around £8.3bn identified through more efficient delivery. Nevertheless, the scale of investment now envisaged is unprecedented: total spending on energy infrastructure over the next five years is estimated at between £700bn and £900bn.
Government and industry response
Michael Shanks, the energy minister, said the government was “taking a strategic approach to building an energy system fit for the future – that safeguards our energy independence and keeps bills down while driving economic growth in every corner of Britain.” He described Neso’s report as “a blueprint for where our electricity grid is needed – to power AI and industry, and ensure homes and businesses benefit from Britain’s clean, homegrown energy.”
Labour has already launched a Clean Power Action Plan (December 2024) outlining measures to decarbonise the grid by 2030, including reforms to planning, grid connections and renewable energy policy. The government’s definition of clean power is that at least 95% of electricity generation should come from low-carbon sources, with no more than 5% from unabated gas. It has also pledged an Energy Independence Act and a Green Prosperity Plan, which aims to invest £23.7bn over the course of the new parliament to catalyse private sector investment.
Alice Delahunty, the head of National Grid’s transmission business, said the company was “already moving quickly” to upgrade its network, increase capacity and support economic growth, “while keeping a clear focus on consumer value and reducing costs.” National Grid plans to invest £31bn in its UK electricity transmission network by 2031 as part of a wider strategy to strengthen the system and enable new connections. Delahunty added: “As electricity demand grows, we need clear and consistent signals on future network needs, including through connections reform. Plans like this from Neso are an important step in the right direction, showing the upgrades and scale of further investment needed, alongside greater use of flexibility.”
Neso was formally established in October 2024, taking over from National Grid’s Electricity System Operator. Its strategic planning role is now central to delivering the government’s net-zero targets, with the revised cost forecasts underscoring the scale of the challenge — and the price tag.
