Comment

Reducing energy and grid costs to unlock development and infrastructure

Approaching UKREiiF this year, it is difficult to ignore the hurdles we are facing in energy and infrastructure. High energy costs, coupled with grid connection delays and charges are causing challenges across sectors. But there is much to be positive about. Director, Sustainability and ESG, Barny Evans argues that there’s huge scope for the industry to improve viability, accelerate development, cut emissions and reduce bills if we change our approach and seize the opportunity.

The world of energy supply is in flux and there is huge demand for it in new housing, data centres, vehicle charging and other development. With that backdrop, our sector must do everything it can to be smarter and more efficient to reduce costs and get things built. At present, we have barely scratched the surface of what can be done to reduce energy bills and ease grid connections. We need to change our approach and this is how.

The challenges

Britain now faces some of the highest energy prices in the world. On a recent project in Ontario, our retail client was paying roughly £100 per MWh for electricity. A comparable business in the UK would be paying around double that — and Ontario is hardly the cheapest place in the world. Scale that disparity across an entire economy and the consequences are obvious. We need to pull every lever available to reduce costs while still pressing ahead with decarbonisation.

Yet, the national debate remains polarised, with little willingness to acknowledge the shortcomings at either end. The reality is that our long-term future is overwhelmingly electric and powered by renewables, but oil and gas will remain part of the mix for decades. The transition must be cost effective; there is little point avoiding the worst impacts of climate change, only to consign ourselves to decades of economic stagnation, diminished quality of life and reduced personal freedom. We need to pursue every credible route to lower energy prices while cutting emissions. That will require compromise. Offshore wind at £92/MWh will not reduce electricity bills, but nor will new gas generation at similar prices.

For many of us at UKREiiF, the challenge is not only the cost of energy but also the cost of getting it to where it is needed. Grid connection delays and charges are slowing housebuilding, data centres, logistics and the very renewable schemes required to fix the problem. Record investment is flowing into the grid, but delivery takes time – and every pound spent will ultimately be recovered through the cost of new homes, warehouses, wind farms and data centres.

The untapped opportunities

The good news is that there is still enormous scope for the real estate and infrastructure industry to improve viability, accelerate development, cut emissions and reduce bills. The untapped opportunity lies in being far smarter about both decarbonisation and the grid.

Despite all the talk about a modernised electrical grid – bidirectional flows, prosumers, smart management – we are nowhere near exploiting the full potential. Government, industry and the real estate sector can seize opportunities that could deliver huge benefits:

Oversized residential grid connections 

Often the grid capacity requested is far beyond what is actually required. Evidence from Future Homes Standard compliant developments shows peak demand will be far lower than assumed. A recent regional energy plan allocated 7.5 kVA per home when the evidence suggests the true requirement will be closer to a third of that. The cost implications of such over provision are enormous and the impact on timescales.

Oversized industrial grid connections 

In logistics, connection requests are regularly many times higher than necessary, driven by attempts to “future proof” for EV charging, robotics and other technologies. This assumes the worst case for every unit, despite the diversity of uses across a typical park. Better data would allow lower, more realistic connection sizes – saving significant time and capital.

Microgrids and shared infrastructure 

Most new developments still assume each building must manage its own energy needs independently. This leads to absurd situations where one building exports power while its neighbour imports it, driving up network costs. The issue is magnified by EV and eHGV charging being planned on a building-by-building basis rather than shared hubs. Microgrids could dramatically reduce peak demand, energy bills and infrastructure costs. Their potential far exceeds that of heat networks, yet deployment remains minimal and Government awareness is low. Microgrids should be the default for new development.

Time of use tariffs as standard 

New homes and commercial buildings will soon have solar, heat pumps, hot water storage and, in many cases, an EV. Time of use tariffs allow occupants to save money, reduce peak demand and support renewable integration. Many will adopt them voluntarily, but they should be the default for all new properties.

We are driving this agenda forward. We are working with HUBBPRO, whose modelling system helps housebuilders predict peak electrical demand far more accurately, reducing costs and speeding delivery. On every new development we now consider how to reduce grid connection sizes and where microgrids can cut both capex and opex.

For existing portfolios, I advise the MapMortar platform, which uses AI and online data to help property owners develop cost effective decarbonisation strategies without hundreds of site audits, and with rapid ROI analysis. 

Energy costs will remain a challenge for the UK for the foreseeable future, but we can do far more to reduce them while accelerating decarbonisation. Whether you are shaping a new project, an investment strategy or a policy intervention, the question should always be the same: are we being as smart as we possibly can be about energy?

For more information, or to discuss how we can support being smart about energy, please contact Barny Evans. 

Barny will be attending UKREiiF from 19-21 May. Please get in touch to arrange a meeting to discuss energy and infrastructure. 

30 April 2026