The scale of global investment in the Energy Transition sector is vast: according to Bloomberg’s report on Energy Transition Investment, it reached $1.8 trillion in 2023, about 1.7% of global GDP. This annual level may need to treble to achieve Net Zero. Investment spans renewable energy generation (solar, wind, and hydro), hydrogen, electrified transport, energy storage, and carbon capture.

In recent years, Bloomberg has started including power grids within Energy Transition investment as it becomes clear they must be upgraded to handle the surge in electricity transmission and distribution. Utility and infrastructure services firms are quietly playing a crucial role—planning and delivering the necessary grid connections and electrical infrastructure.

Grid Bottlenecks Threaten Progress

Solar photovoltaic (PV) power generation has been growing at an unforeseen rate, doubling capacity every three years. With rapidly decreasing costs, PV has become the lowest-cost electricity generation technology. However, a growing grid backlog is putting projects at risk.

National electricity transmission and distribution systems were not designed for the rapid adoption of distributed power generation and the rising demand from EVs and heat pumps. The impact is clear: some projects in planning are now being assigned connection dates extending well into the 2030s. If left unresolved, this issue could slow progress toward Net Zero goals and prevent full economic benefits from cheap, abundant energy.

The Role of Independent Connection Providers (ICPs)

To tackle these delays, the UK government introduced the Connections Action Plan, aiming to reduce connection times from five years to just six months. A key contribution to the solution is the expansion of Independent Connection Providers (ICPs)—third-party utility and infrastructure services firms that speed up the connection process.

Originally introduced by Ofgem to reduce the monopoly power of Distribution Network Operators (DNOs), ICPs now play a critical role in accelerating grid access. The market is growing fast, with over 40 transactions involving registered ICPs in the UK in the past five years, showing strong investor interest in this sector.

Winning in the Evolving Market

Yet, success in this competitive market is not guaranteed. Several key factors will determine which ICPs thrive:

Supply Chain Capabilities – With lead times for key equipment such as power transformers reaching 120 weeks, firms with well-established supplier relationships will gain a competitive advantage.
Human Capital – Demand for engineers, technicians, and skilled trades has outpaced workforce development, making attracting and retaining talent a key differentiator.
Industry Expertise – Deep knowledge of DNOs, TNOs, and regulatory frameworks will be essential for securing and delivering large-scale projects.
Scope of Services – Ability to under a broader range of connection services and more complex projects improve margins and competitiveness.
Geographic Footprint – Coverage of geographies where national and regional clients operate make them more attractive
Processes and Systems – Robust processes and systems to manage resourcing, safety and financial control of multi-year projects

The Energy Transition presents a huge opportunity not just for infrastructure business, but for firms that provide the services to deliver it. However, only those who can navigate these challenges effectively will be likely be successful.

Download our whitepaper to uncover the full insights, key success factors, and investment opportunities in this evolving landscape.