Prime Minister Andy Burnham has set out plans to create a new public body which will invest in the electricity grid.
Called Great British Grid, it aims to speed up grid connections, such as those required for electric vehicle (EV) charging hubs and renewable energy schemes, by introducing more competition for connection projects.
It comes as part of a suite of proposals to ensure that energy costs are brought down across a decade and come in line with European prices.
The government has today (Tuesday 29 September) announced Great British Grid (GBG), a new publicly owned body within Great British Energy that will help accelerate the delivery of the electricity network infrastructure Britain needs. Just as Great British Energy is investing in supply chain, generation and storage projects across the country, now Great British Grid will be able to invest in the electricity grid.
Great British Grid will bring together public and private investment to support the delivery of critical network infrastructure across the country. Working alongside existing network operators, it will help accelerate projects, increase competition and support the delivery of the grid upgrades needed to power Britain’s future.
Together, Great British Energy and Great British Grid will be able to invest across the energy system, supporting both the clean power generation Britain needs and the network infrastructure required to get that power to homes, businesses and industry.
The government is already working with NESO and Ofgem to reform the connections system, including overhauling the connections queue and removing more than 300 GW of speculative capacity. But further investment will be needed over the coming decades to upgrade the electricity network and ensure it can meet rising demand from homes, industry and new sources of clean power.
To help projects and businesses connect to the grid more quickly, the government will also bring forward reforms to expand self-build connections. This will allow developers and businesses to build their own connections where appropriate, rather than waiting for network companies to do so, helping reduce delays, lower costs and accelerate growth.
Accelerating self-build connections has delivered significant benefits internationally, with similar reforms in Ireland reducing connection times by up to 11 months.
Organisations such as the Society of Motor Manufacturers and Traders (SMMT) have highlighted that UK industrial electricity prices that are more than double (115%) the European average, having surged since 2019 when UK costs were around 65% higher.
A more holistic approach is therefore needed, accelerating grid infrastructure, streamlining connections for renewables projects, decoupling electricity prices from the international price of gas, and reforming grid network charges and standing charges, the SMMT has previously said.
The new body will invest and compete in connection projects alongside the private companies that currently manage the grid, stating it would be easier for those waiting for connections to finance the infrastructure themselves with GB Grid either supporting or even investing in the projects with them.
Cash for GB Grid will come from the allocation of funding for the public investment company GB Energy.
Dhara Vyas, chief executive of Energy UK, said:
“In the next five years the transmission owners, the ones doing that highway of pylons, getting the electricity from source to homes to businesses, they are spending £90bn in the next five years”
Jon Skinner of community energy collective Glow Homes said:
“Burnham’s plan talks about speeding up grid connections and increasing renewable generation, and that is important. But we should also be asking how homes, streets and communities can become active participants in the energy system rather than simply waiting at the end of the cable for electricity to arrive.
“The grid of the future should not just be bigger. It needs to be smarter, more distributed and much better at making use of the generation and storage capacity we can create much closer to where that electricity is actually being used.”
Industry reaction:
Lawrence Slade, Chief Executive, Energy Networks Association, which represents the UK’s electricity networks said:
“Energy networks are investing tens of billions of pounds to upgrade the grid in order to help customers access affordable energy, strengthen national energy security and boost the economy. Network operators are keen to work with government on any measures that will bring down energy costs for consumers, whilst maintaining the delivery of the infrastructure the country needs to meet its demands for clean, affordable and secure power, now and in the future.
“The investment will maintain one of the most dependable electricity systems in the world with the UK’s electricity networks operating at 99.99% reliability. Ensuring the economic benefits of network investment are realised right around the country is a priority for the forthcoming Electricity Networks Sector Growth Plan, alongside supporting the development of the domestic energy infrastructure supply chain.”
Shane Brennan, chief executive officer, ChargeUK said:
“The PM is right to single out grid investment as a priority, but a focus on transmission is too narrow. Charging infrastructure operators are suffering from expensive delayed grid access. We can’t continue building a twenty first century transport energy system, on nineteenth century infrastructure.
“We hope that this is just the start of a more radical approach, because a structural change that might mean lower bills in ten years is not going to deliver the investor confidence and driver benefits we need at this crucial moment in the EV transition.”
Ben Fletcher, Chief Executive of business group Logistics UK said:
“Logistics businesses are currently making every effort to switch from fossil fuels to more sustainable options, but while many are keen to change to electric technologies, access to sufficient grid capacity is proving a significant barrier to doing so, and is something that we have been raising with government for some time. This current lack of grid access is holding back our sector’s ability to drive the economic growth we know the country is capable of.
“As it stands, the existing electricity grid cannot meet the demands of our sector while continuing to service the needs of consumers, businesses, schools and hospitals. Electrifying our industry will be essential to cutting the UK’s carbon emissions, while reducing the country’s exposure to global economic instability and volatile diesel prices. However, fully electrifying road freight alone will require an estimated 32 TWh of electricity a year (the equivalent to around 40% of the power used by UK households), on top of the energy needed to decarbonise logistics hub operations, provide shore power for ships at berth and help to shift to an electric future for air freight and travel. Delivering this energy where it is needed will require substantial new grid capacity, yet currently, when businesses seek new connections, they are often quoted eye-watering sums and multi-year waits.
“From the Prime Minister’s speech, it appears that the planned GB Grid could provide a useful alternative route to delivering these vital upgrades. The test will be whether the new model can genuinely accelerate logistics electrification, reduce costs and better respond to commercial demand. Getting this right will require recognising that logistics is becoming a major electricity user, with substantial new demand at hubs, ports and airports and along the UK’s key freight corridors.”
Vicky Edmonds, Chief Executive Officer of EVA England, says:
“Investment in Britain’s electricity grid is welcome and important for the EV transition. Driving faster upgrades to the electricity network should help accelerate the rollout of public charging, support more home and workplace charging, and remove some of the connection barriers that are holding back the transition to electric.
But grid investment alone will not make the transition work for drivers. We are increasingly seeing a two-tier system: those who can charge cheaply at home benefit from much lower running costs, while drivers without a driveway are often left relying on a public network that is significantly more expensive.
That divide becomes even harder to justify this week, with VAT on household electricity falling to zero while public charging remains subject to 20% VAT. Government now needs to match long-term infrastructure investment with action to bring down public charging costs and expand access to affordable charging, so that choosing electric is a realistic option for every driver.”
Yselkla Farmer, CEO of BEAMA, said:
“The ambition to build the electrification network Britian needs is more than welcome. The proposed investment in a GB Grid recognises the need to unblock issues of underinvestment in certain areas of the supply chain.
“But what we cannot afford is a protracted process or uncertainty over funding for grid development. Delivery has to be now to stimulate the structured growth the sector is planning for.”
“We understand the GB Grid proposal is focused on transmission connections, but investment is needed top to bottom. So, it is really important that we see investment from transmission through to distribution, to ensure that electrification can progress at the pace we need it to.
“What is very helpful for manufacturers is having a clear view of upcoming investments. This visibility will help them plan when to invest in – both in new equipment and through recruitment. And, make early decisions that accelerate the path to electrification. Critically, it helps the industry avoid delaying decisions through uncertainty of demand.”
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