Britain has spent the past few years congratulating itself on how fast renewable generation has grown. DESNZ’s own figures show renewables supplied 52.1% of UK electricity in 2025, the second year in a row past the halfway mark, with wind alone contributing 29.5%. What a National Audit Office report published this month makes clear is that the electricity grid built to carry all that power hasn’t kept pace, and the gap is now the thing standing between Britain and its climate targets, not planning permission for wind farms or the cost of solar panels.
The NAO’s report on upgrading the electricity transmission network lands hard on one point: ambition was never the problem. Execution was. Back in 2015, government policy shifted to a market-led approach to grid connections, essentially letting developers apply for capacity as projects came forward rather than planning the network centrally around where generation was expected to grow. That approach let renewable projects multiply far faster than the wires and substations needed to connect them.
The result is a connection queue that has grown roughly tenfold in five years, now standing at more than 700 gigawatts, something like four times what Britain is actually projected to need by 2030. Viable projects, ready to build and connect, are stuck behind so-called zombie schemes that hold a place in the queue without any real intention or ability to proceed. Some genuine projects are now facing waits of the better part of a decade simply to get a connection date.
Ofgem puts the cost of the upgrade needed to clear this backlog at around £70bn over the next several years. The NAO’s assessment of that timetable is blunt: “very challenging.” Sixty-four major transmission projects are currently underway, and many of them are still at an early stage. Land-use approvals alone are adding up to three years to project timelines, and the report flags supply chain and skills shortages- welders, cable engineers, transformer manufacturing capacity- as a second, harder constraint that money alone won’t fix quickly.
Who actually pays for this?
The bill for grid congestion isn’t theoretical. It already shows up as constraint payments, the money network operators pay generators to switch off when the grid can’t carry the power they’re producing, which currently costs consumers somewhere in the region of £2bn a year. The NAO warns that figure could climb toward £8bn a year by 2030 if the upgrade programme doesn’t accelerate. That’s not a cost that sits with generators. It gets passed through to customers on their bills, in exactly the way that wholesale price spikes do.
There’s a counterargument worth including here, because it’s the one Ofgem is making. The regulator’s own analysis suggests households would end up roughly £30 a year better off if the upgrade happens at the pace required, since the reduction in constraint costs outweighs the network charges needed to pay for new infrastructure. In other words, the £70bn isn’t purely a new cost being added to bills. Some of it replaces a cost that’s already there and getting worse. Whether that argument survives contact with a bill that includes both new network charges and years of overlapping constraint payments during construction is a fair question, and one the NAO doesn’t fully settle.
The battery storage twist!!
Layered on top of the transmission story is a stranger problem on the connections side. Reforms introduced by DESNZ and Ofgem this year were meant to clear out non-viable projects clogging the queue, and by their own account the process filtered out 221 gigawatts of dead weight. But the same reforms have thrown up a new imbalance: battery storage projects have advanced through the process in such volume that capacity now sits well above what the system is projected to need, by DESNZ and Ofgem’s own numbers, close to 15 gigawatts above the government’s 2030 range and over 60 gigawatts above projected need by 2035.
The two departments issued a joint open letter in the spring asking battery developers to reassess the viability of their own projects, and a rule change is under consideration that would impose a fee on developers in oversubscribed technology categories to encourage the non-viable ones to drop out voluntarily. It’s an odd position to be in: too little transmission capacity in some places, too much speculative battery capacity queued up in others, both problems traceable to the same market-led, first-come-first-served system the NAO is now criticising.
What this means for UK businesses?
For a business trying to plan energy costs over the next five years, the grid story matters more than any single price cap announcement. Constraint costs are a direct line item on network charges today, and they’re rising. New connections, whether for a company installing solar and storage on site or one simply trying to secure additional capacity for growth, are running into a queue system that the government’s own auditor says isn’t fit for the volume of applications it’s handling. And the £70bn upgrade programme, however necessary, will show up on business energy bills through network charges for years before the benefits of a less congested grid are fully felt.
None of this points to a quick fix. The NAO’s report is really a statement that the UK committed to a scale of grid transformation without building the institutional capacity, in planning, skills, and supply chains, to deliver it on the timeline the climate targets assume. Businesses reviewing energy contracts or capital plans for the next few years would do well to treat rising network charges as a near-certainty rather than a risk, and to factor grid connection timelines into any plans that depend on new capacity, because on current form, those timelines are the constraint that matters most.
Read the full NAO report at: www.nao.org.uk/reports/upgrading-the-electricity-transmission-network/