Logistics sector looks to GB Grid to unlock freight electrification

The business group said the proposed Great British Grid could provide a new route to delivering the electricity infrastructure needed to support the rapid electrification of freight, warehouses, ports and airports.

Logistics UK’s comments came after Prime Minister Andy Burnham used his first Labour Party conference speech as prime minister on Tuesday (29 September) to announce plans for GB Grid, a publicly owned body intended to invest in electricity network infrastructure and accelerate connections for businesses.

Burnham said the new organisation would operate alongside existing private-sector network companies, increasing competition in the provision of grid connections. Businesses would also be given greater scope to build their own connection infrastructure, with GB Grid able to co-invest.

The government says the approach is intended to tackle lengthy waits for connections, which have increasingly become a constraint on investment and the development of new industrial and commercial projects.

GB Grid is expected to sit within the wider Great British Energy structure and have access to funding previously allocated to the state-owned energy company. 

Ben Fletcher, Logistics UK chief executive, said the sector was already working to move towards lower-carbon technologies but that a lack of available grid capacity was preventing companies from making the necessary investments.

“Access to sufficient grid capacity is proving a significant barrier,” he said, adding that the problem was holding back the sector’s ability to contribute to economic growth.

Logistics UK estimates that fully electrifying UK road freight alone would require around 32TWh of electricity a year – equivalent to approximately 40% of current household electricity consumption.

That requirement would come on top of the additional electricity needed to decarbonise logistics hubs, provide shore power for ships in port and support the electrification of air freight and aviation-related operations.

Fletcher said the existing electricity network could not meet those demands while continuing to serve households, businesses and essential services without substantial investment in new capacity.

The problem is not simply the amount of electricity available, but getting new connections to the places where freight activity takes place. Logistics operators increasingly need high-capacity connections at distribution centres, ports, airports and truck charging facilities, as well as along major freight routes.

Businesses seeking new connections can currently face substantial costs and waits running into several years, according to Logistics UK.

The organisation believes GB Grid could offer an alternative to the existing process, but warned that its success would depend on whether it can deliver connections more quickly and at lower cost.

“From the Prime Minister’s speech, it appears that the planned GB Grid could provide a useful alternative route to delivering these vital upgrades,” Fletcher said.

“The test will be whether the new model can genuinely accelerate logistics electrification, reduce costs and better respond to commercial demands.”

Energy was one part of a wide-ranging conference speech in which Burnham sought to set out his government’s approach to what he described as a cost crisis facing households and businesses.

He argued that Britain needed greater public control over essential infrastructure and said energy costs should be brought into line with those of other European countries within a decade.

Fletcher said logistics should be recognised as an increasingly significant electricity user, with demand growing not just from electric trucks but across the wider freight network.

“Logistics is becoming a major electricity user, with substantial new demand at hubs, ports and airports and along the UK’s key freight corridors,” he said.