West London faces a de facto ban on new homes for more than a decade because the power grid is running out of capacity.
Homebuilders have been told it will take until 2035 for new developments in Hillingdon, Ealing and Hounslow to be connected to the power grid as it does not have the capacity to serve them.
Energy companies and regulators are scrambling to fix the problem while Business Secretary Kwasi Kwarteng has ordered officials to monitor the situation.
The heist promises to delay a series of projects in London, where a typical property costs £526,000.
Builders have raised fears that the problem is not limited to the capital. The problem is understood to also affect parts of the Thames Valley.
In a letter to developers, the Greater London Authority blamed the problems in west London on a series of planned data centers which are expected to suck huge amounts of power.
The area is a popular location for these centers as it is adjacent to the “superhighway” internet cables that run along the M4 motorway and into the Atlantic Ocean – dubbed the “Silicon Corridor”. A data center can consume the same amount of energy as up to 10,000 homes.
This has resulted in some developers being told they cannot connect housing projects to the grid until 2035, the Financial Times reported, with data centers given priority on a ‘first come, first served’ basis. .
Scottish and Southern Electricity Networks (SSEN), which serves part of the affected area, and the National Grid are considering upgrading the network, but this is expected to take several years.
SSEN insisted there was no “ban” on new developments, but the warning that it could not connect new projects amounted to a de facto moratorium until the problem can be solved.
It has raised concerns that a series of data centers being built in the South East are clogging local power grids and hampering efforts to tackle the housing crisis. A source at a major homebuilder said his firm, one of Britain’s biggest, was already looking at potential sites amid fears they could face similar issues.
“It’s quite worrying,” the source added. “We’re concerned that this could be a problem in other areas as well.”
The Home Builders Federation (HBF) said that alongside environmental rules imposed by the green quango Natural England, power grid capacity issues threatened to further derail the government’s target to build 300,000 homes a year.
A spokesperson added: ‘Where the impact of new housing construction is minimal, preventing housing delivery as a solution to these issues is disproportionate.
“If we are to provide much-needed housing, we urge the government to ensure that its agencies and public service providers fulfill their responsibilities.”
It is understood that the options being considered by SSEN and the National Grid include negotiating with data center companies to allow residential developments with lower power requirements to move up the queue.
They could also encourage more battery storage operators to set up shop in the area or encourage homes and businesses to consume less energy at certain times of the day through so-called smart tariffs.
Kwasi Kwarteng, the business secretary, has ordered government officials to monitor the situation, according to a letter seen by the Daily Telegraph. Energy regulator Ofgem is considering changes to grid connection rules to make it easier for property developments to progress. These proposals and other measures are expected to be outlined in more detail by the government next week.
On Thursday, Labor Party Mayor of London Sadiq Khan also said he was “very concerned” that network problems were delaying the delivery of “thousands of much needed homes”.
“The mayor’s team is working closely with responsible network providers, to seek solutions to mitigate potential delays and unblock the issue,” Mr Khan’s spokesman said.
The Energy Networks Association, which represents energy network companies in the UK and Ireland, insisted the problems in west London were an “isolated circumstance caused by… the demand for a growth location of data centers, much higher than expected”.
A spokesperson added: “Power grids are using all available tools, including the deployment of innovative technologies, to speed connections and ensure future demands are handled as efficiently as possible.
“There is significant collaboration between industry, the Greater London Authority and the property developers themselves to address these challenges, but a long-term approach to investing is needed.
“We are in dialogue with Ofgem to make changes to their reactive regime and ensure that where new infrastructure is needed, network companies can build it once and build it right.”
A spokesman for National Grid ESO (electricity system operator) said: “This is a problem with connection agreements at the local distribution network level.
“ESO is actively working with all parties involved to find solutions to make the connections happen.”
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