London’s status as a global business capital has long depended on world-class infrastructure. For decades, the city’s road, rail and water networks have enabled the movement of millions of people, and hundreds of tons of goods, across the city every year. Today, another form of infrastructure is just as critical to the capital’s future: the electricity grid.
As things stand, a lack of grid connectivity for new projects is holding London and the wider UK back. That’s why, earlier this year, we conducted a macroeconomic study, Gridunlocked – in collaboration with Cambridge Econometrics – exploring the socioeconomic benefits of investing in the UK’s electricity grid.
The research reveals that maintaining an ambitious, ‘supercharged’ trajectory for grid investment could unlock an additional £194bn in economic output by 2040, through just £34bn of additional investment. That’s a near four-to-one return on an investment which would also support 92,000 extra jobs annually.
With the right level of investment and coordination, grid modernisation could become one of the biggest economic catalysts of the next two decades, helping strengthen energy security, support economic growth and accelerate the transition to a low-carbon future. While these are national findings, the figures have a particular relevance for London.
The city’s future growth will increasingly depend on a future-proofed power system, and access to reliable, affordable and flexible electricity.
Transport, heating and industry are increasingly powered by electricity rather than fossil fuels, while total electricity demand is expected to double by 2050. Much of this growth will be driven by energy-intensive technologies such as AI, advanced computing and digital infrastructure that will underpin future smart cities and communities.
For London, increased investment in digital infrastructure, electrified transport, heat networks, smart buildings and connected mobility systems depends on the electricity network keeping pace. The success of every EV charging point, retrofitted office building, low-carbon development and digitally enabled transport solution ultimately hinges on sufficient grid capacity.
This is why our electricity network should no longer be viewed solely as a utility, but as economic infrastructure. A future-proofed system can underpin the next era of growth, innovation and competitiveness, while a lack of capacity risks deterring investment and reducing London’s ability to go on attracting the businesses of the future.
Grid upgrades are essential to maintaining London’s industrial strengths. One of the key findings from Gridunlocked is that the services sector, including technology, finance, education and professional services, would accrue the largest gains from accelerated grid investment. Under the supercharged pathway, these sectors could contribute an additional £95bn in economic output. The capital’s world-renowned property and construction sectors could also see their output rise by £33bn and £20bn respectively.
However, investment alone will not deliver the full benefits identified in Gridunlocked. Achieving widespread electrification requires a whole-system approach that coordinates generation, storage, transmission, distribution and demand, alongside digital technologies such as AI, advanced monitoring and digital twins. Aligning policy, investment and delivery will be equally important.
For London, this presents a significant opportunity. The city can position itself at the forefront of smart electrification, demonstrating how interlinked clean energy, digital technology, transport and built environment systems can support sustainable growth.
As global competition for investment intensifies, access to clean, reliable and affordable power will become increasingly important. Gridunlocked shows that investing in the electricity grid is about more than enabling the energy transition – it’s also about unlocking economic growth, supporting skilled jobs, strengthening energy security and improving resilience.
For London, the UK’s electricity grid should be viewed as economic infrastructure, fundamental to the city’s future prosperity. If we invest wisely, design boldly and deliver with purpose, the capital can help capture the full economic prize identified by Gridunlocked while building a more competitive, secure and sustainable future for the UK.
Photo credit: Arup.