Turner & Townsend’s Summer 2025 UK Construction Market Intelligence report (UKMI) has revealed that ‘intense competition’ for UK power connections is creating uncertainty, despite growing infrastructure opportunities
The report indicates that infrastructure tender price inflation is projected to remain at a higher rate of 4.5% in 2025 and increase to 5.0% over the next three years, while real estate tender price inflation (TPI) is expected to increase from 3.0% in 2025 to 3.5% in 2026.
However, despite growing infrastructure opportunities, developers are facing an ongoing challenge in navigating the impacts of a lengthening ‘connection queue’ as demand drives electricity grid reform to improve connections.
Increasing infrastructure projects are driving demand for power connections
From the first quarter of 2025, the number of new orders for infrastructure projects experienced a significant leap of 127.8%, more than double that of the previous period. A part of this sudden growth is the renewed emphasis on improving the grid network to power new homes, hospitals, data centres, advanced manufacturing facilities, and infrastructure.
Due to this leap in demand, the National Grid itself predicts that the vast majority of new applicants will be waiting until 2036 or later before power connections are implemented.
This leap in infrastructure is likely due to the government’s latest infrastructure strategy, published last month.
The report recommends prioritising power connections early
Power connections are not as significant a consideration for a project as planning and funding, as the delays caused are fueling added market uncertainty and, in turn, cost pressures.
The report therefore advises developers to prioritise their power connections early in the project and consider approaches that mitigate the impact of competition to connect as soon as possible.
Approaches include using temporary or lower-capacity connections to begin with, utilising existing cables on brownfield land, or employing on-site power generation with flexible connections that allow excess power generated to return 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.”
