As Local Authorities seek to reduce the carbon footprint of development, the planning requirements to support this can significantly increase the amount of electric power a development needs. In the residential market, there is increased pressure to provide for electric car charging points, electric central heating systems and more – the problem is securing enough grid capacity to meet the demand for cleaner environments that policy now aims at.
Developers need to carefully consider the amount of capacity they secure from the Distribution Network Operator (DNO) - Gateley Hamer has seen several cases where developers were advised poorly and seriously underestimated the requirement – a problem that can be compounded when local authorities impose planning conditions that indirectly require more capacity than initially envisaged.
The high cost of under-capacity: long delays & serious money
Developers who find themselves having to look for additional capacity will inevitably face increased costs. There is also the prospect that capacity can only be made available on the basis that upgrades to the network are carried out, which can be very expensive if items such as new transformers are required. Whilst there may be some provision to recover some of the cost from other parties benefitting from the paid upgrades, this may take time and not be in keeping with the developer’s appraisal model.
Developers should not assume that gas is the answer; they may struggle to secure a connection at a reasonable cost, for example where significant reinforcement works to the network are required. Even a gas survey to determine whether there is capacity on the network can cost in excess of £50,000.
Gone are the days where you could place an arbitrary figure in your appraisal to account for utilities. Full quotations that are sufficient for the proposed development need to be obtained, ensuring that they fully allow for any necessary capacity increases. If capacity is not secured early, the upward spiral of demand is such that another user could well secure that capacity, with the prospect that connection costs increase, especially where upgrades are needed.