The additional investment required in the Grid to meet the UK’s 2050 net zero target would deliver a 4:1 return, according to a new report from Arup.
Modelling carried out by the consultancy compares the economic impact of the different levels of investment required to hit the 2050 target or continue with a more business-as-usual approach.
The second scenario, which Arup describes as ‘underpowered’, requires £194m of investment by 2040.
Achieving the higher-ambition ‘supercharged’ scenario will require an additional £34bn of investment in the Grid, but would enable the connection of more renewable generation and ensure it could meet the demand from electric vehicles and heat pumps.
Overcoming these constraints would add an extra £194bn to the gross value of the economy over the period to 2040, which represents a 4:1 return on investment, Arup calculates.
Its macroeconomic study, Gridunlocked – unlocking the benefits of investing in the electricity Grid, conducted with Cambridge Econometrics, says investing in line with the ‘supercharged’ scenario would ensure the UK’s electricity network keeps pace with rising demand and shield businesses and consumers from global gas price volatility.
The study expects there will be an extra £20bn in gross value added for the construction sector, driven by Grid upgrades, new connections and enabling infrastructure.
