Beyond Renewable Energy: Why Grid Connection Delays Matter for Productivity

By Anil Gogebakan from the Wales Productivity Forum

Productivity is central to long-run economic growth. When inputs such as capital, labour, and energy generate more output, living standards improve. Yet productivity growth in the UK has been slow over the past two decades and has not fully recovered. This makes productivity one of the country’s most important economic challenges, and Wales is no exception (Jones, 2025). 

The productivity challenge is not driven by a single factor. It depends on investment, skills, innovation, infrastructure and more. Each of these is widely discussed in this context. However, renewable energy generation and infrastructure capacity are often considered separately.  

In practice, constraints in the energy system, especially limits and long delays on connecting new renewable generation to the electricity grid (Pollitt, Duma, Mitchell, & Covatariu, 2026), can hold back productivity potential. Delayed connections mean delayed access to low-cost energy.  

When connections are delayed, investment can be held back, and energy costs stay higher for longer. The effects are not evenly spread. They vary by region, by sector and by how long the connection delay lasts.  

Since joining the Wales Productivity Forum at Cardiff Business School, I have been thinking about how my research can contribute to understanding this challenge. My work sits at the intersection of productivity, energy and environmental economics. The rapid energy transition towards renewables in the UK provides a unique setting to study how productivity is affected when infrastructure bottlenecks fail to keep pace with change.  

Given the rapid energy transition toward renewables, delays and constraints in the electricity grid (Arup, Grid Unlocked) may shape productivity differently across regions and sectors. I am particularly excited to explore the productivity implications of the energy transition and its uneven effects across the UK economy. 

The transition to net zero is often discussed in terms of expanding renewable energy generation capacity. However, generating electricity from renewables is only part of the story. That electricity still needs to reach the businesses and households that use it. An important bottleneck emerges here: delays in electricity grid connections.  

Across the UK, renewable energy projects face long waiting times before they can connect to the transmission network (NESO, Connections Reform Results). Under the previous connection system, some projects that were ready to generate electricity faced waiting times of up to ten years before they could connect. The connections queue exceeded 700 GW – around four times the capacity required to achieve the UK’s Clean Power 2030 target (NESO, Connections Reform Results).  

In many cases, projects that are ready to generate must wait several years before they are connected. While this is usually discussed as an energy policy issue, with delays slowing the pace of decarbonisation, it also raises an important but less discussed question: What is the effect of these delays on productivity across regions and sectors? 

How do grid connection delays affect regional productivity by preventing energy from flowing to where it is most valuable? 

It has long been recognised that productivity depends not only on the availability of inputs, but also on how they are allocated across economic units. When inputs such as capital, labour, and energy cannot flow to their most productive uses, productivity falls. This is often referred to as misallocation. Existing research has mainly focused on sources of misallocation such as regulation, taxation, financial frictions, and barriers to competition. Infrastructure constraints have received less attention, particularly when they interact with structural changes such as the rapid energy transition.  

Yet this interaction between the energy transition and grid connection delays can help us better understand differences in productivity across regions. I aim to explore this link and build a clearer connection between regional productivity and infrastructure bottlenecks. 

Electricity provides an excellent example. Different industries and regions rely on energy to very different degrees. Manufacturing, chemicals, metals and transport require far more energy than many service industries. When electricity supply becomes constrained because renewable generation cannot connect to the grid, these effects are unlikely to be evenly distributed across the economy. 

I argue that grid connection delays generate exactly this type of distortion. When renewable projects are delayed, the economy effectively loses access to low-cost electricity capacity. Regions facing longer connection delays may therefore experience persistently higher energy costs, which can reduce their productivity potential, particularly in energy-intensive industries. If some regions and sectors gain faster access to cheaper energy while others are left behind, energy is no longer allocated efficiently across the economy.  

This matters even more because modern economies are highly interconnected through complex supply chains. When one sector faces higher production costs or lower output, these effects can spread to many other industries. A local infrastructure bottleneck therefore has the potential to generate economy-wide productivity losses. 

To investigate this question, I combine several datasets that have not previously been analysed together. These include detailed information on renewable energy projects and their planned and actual grid connection dates, UK input-output tables, regional economic data, and sectoral energy consumption. Bringing these data together allows me to measure how delays in renewable connections translate into differences in energy availability across industries and regions. 

The objective is not simply to document delays, but to quantify their economic cost. How much productivity is lost because renewable electricity cannot reach the grid on time? Which industries are most affected? Which regions face the greatest exposure? These are questions that have become increasingly relevant as electricity demand continues to grow through electrification, artificial intelligence, electric vehicles and industrial decarbonisation. 

Understanding where infrastructure bottlenecks occur, how they affect businesses and which sectors are most exposed can help policymakers prioritise investments that deliver not only environmental benefits but also higher economic productivity. In other words, improving electricity networks may be as important for future productivity growth as improving transport infrastructure or digital connectivity. 

As I begin my role at the Wales Productivity Forum, I look forward to contributing to ongoing discussions on the drivers of productivity in Wales. Productivity is a multidimensional challenge involving innovation, skills, investment, institutions, infrastructure and resource allocation. By bringing evidence from energy economics into this conversation, I hope my research can provide another piece of the puzzle. 

The transition to a cleaner economy will require substantial investment in renewable energy. But building generation capacity alone is not enough. Ensuring that clean electricity reaches the firms and industries that need it may prove just as important for future productivity growth.  

Sometimes the biggest barrier to economic performance is not a missing technology. It is the infrastructure that stops us using the technology we already have. That is the question my research sets out to answer. 

Please see details below to contact the author:

Anil Gogebakan, Research Associate, Wales Productivity Forum, Cardiff Business School 
GogebakanA@cardiff.ac.uk | https://anilgogebakan.github.io/