It is tempting to think that plugging a new building into the electricity grid should be as simple as plugging a new computer into a socket in the wall: the connection is made, the power turned on and away you go.
When it comes to substantive commercial buildings, however, it isn’t that straightforward – and failing to appreciate the fact can be costly.
Traditionally, the way things work is that if you need to get a large commercial property connected to the grid, you contact the local distribution network operator (DNO), basically the local electricity company. If it is a high voltage connection that is required, the DNO then has 25 working days to come back and say whether or not a connection is available.
If the answer is ‘no’ then you will probably try to reduce your capacity, after which you need to apply again to the DNO and then wait another 25 working days to get an answer, with little certainty that it will come back positive. The result is that property owners can end up getting stuck in a loop. What’s more, if you’re trying to connect a particularly large or power-hungry building – a connection of 33,000 volts or more – the DNO then has 90 days to respond.
We can effectively cut the distribution network operator out of the equation both in terms of checking capacity and in getting a property connected to the grid
This is where eSmart Networks comes in. We have full visibility of the electricity networks across the UK. As a result, we are able to look at capacity anywhere in the country and following a relatively quick grid study can say whether or not capacity is available for any given site and if so, how much. That means that in a matter of days, we can tell advise our customers on the lay of the land without them having to apply to the DNO and wait the requisite 25 or 90 working days, thereby speeding up and de-risking the process.
Assuming that the required capacity is available, our in-house engineers then design the connection and physically connect a building to the network. So, we can effectively cut the DNO out of the equation both in terms of checking capacity and in actually getting a property connected to the grid, which saves a huge amount of time and, in most cases, money. After all, the timescales and engineering capacity are within our control, which effectively means our clients’ control.
Obviously, it is preferable that a building owner thinks about the connection they require as early as possible owing to the risks involved, but we have seen far too many instances of developers in particular asking the question too late and then finding that no connection is available, or at least not the connection they need. In such a situation, the time and money spent attempting to resolve the situation can cause huge headaches.
To take just one example, we were recently engaged by a landlord with a major warehouse development, effectively a 100,000 sq ft freezer, in the East of England. Unfortunately, the client had asked the question about the connection they needed too late – they had actually already started building the warehouse – and had been told by the DNO that a connection wasn’t currently available, that it would take three years to deliver the capacity and that it would cost around £5m because the network needed reinforcement. Such situations are not uncommon.
Analysing local networks
We took on the developer as a client and set to work analysing the local network. It is safe to say that we came to radically different conclusions to the DNO. We discovered that only minimal reinforcement was needed to achieve the required capacity, that it would cost around £600,000 – little more than 10% of the DNO’s estimate – and it could be delivered in six months.
Obviously, the client was delighted and engaged us on that basis. The entire process, from the initial enquiry to getting the warehouse connected to the grid was actually done in less than six months, thereby saving the developer £4.4m and two and a half years – time that naturally translates into additional revenues. It just goes to show that we can massively reduce both timescales and costs.
That example demonstrates that it is never too late to engage with us, but ideally we would get involved when a developer is still considering a site acquisition. We have a lot of clients, particularly warehouse developers, that approach us with portfolios of sites they are considering buying. In such instances, we are effectively playing a part in the due diligence process on behalf of our clients.
In such instances, we are able to provide a rapid report on each of the sites, telling them what capacity is or isn’t available, how much it will cost them to connect and how long it will take. The client can then use that information when weighing up whether or not to acquire a given site, which is crucial given the potential costs involved. Our intelligence can inform a decision to proceed with a purchase or to walk away, or indeed how much to bid for a site. In short, viability and feasibility cannot be realistically assessed without that information.
Of course, many developers know that they need to investigate capacity and connections prior to purchase, but decide to do so via the traditional route though the DNO. The problem there is that the information they receive can become outdated very quickly: the DNO is under no obligation to provide a running commentary on the state of play. The result is that a developer may think there is capacity, complete a deal and then find that others have taken up the capacity they thought would be available.
The point is that the developer has no control over the process and that it takes time for a deal to go through, let alone to gain planning permission and to build out a site.
Again, we can help. By engaging our services, developers can have the confidence that we will hold their hand throughout the process. Moreover, we have a whole team dedicated to identifying connections for clients and then securing them until such time as they are required, at which point our engineering division steps in to deliver the connection at the lowest cost possible.
So, the key point is simple: using the traditional route of working with the local DNO can be time consuming, costly and inherently involves a significant amount of risk. There is, however, an alternative available.
About eSmart Networks
eSmart Networks is an expert at connecting projects to the electricity grid in the quickest, most cost-effective way. The business simplifies the process, enabling customers to focus on their property development and hitting the date needed for connection. The eSmart Networks team analyse the Distribution Network Operator (DNO) network to secure the most cost-efficient point of connections, helping customers solve any third-party land issues that could risk their planned programme. Its in-house teams then design, plan and deliver the physical connection to the DNO network, enabling them to take full control of the timing and giving customers date and cost certainty.
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