Executive Summary
- The question of whether renewables are overwhelming the energy grid comes to the wrong conclusion – it’s a system management challenge, not a failing policy one
- The speed of development in data centres and AI puts pressure on grid capacity and delivery – but there is an argument to say it can be of benefit
- AI is becoming a quiet enabler, argues Caroline Hulmston of BDO, improving reliability, reducing costs and supporting a more dynamic, decentralised system
Renewables generated a record 53.1% of the UK’s electricity in the first quarter of 2026 – an increase of 7.4% compared to the same period last year, according to figures from RenewableUK.
Wind proved to be the biggest winner, generating 60.8% of all renewable electricity in the first quarter, compared to 55% this time last year. Solar energy was the only other renewable technology to see an increase in generation. Overall increase in low carbon generation occurred despite a drop in nuclear, offset by ‘strong’ output both in onshore and offshore wind.
These figures, as Ana Musat, RenewableUK executive director of policy and engagement put it at the time, further underlined renewables’ position ‘as the backbone of our power system.’ But is there more that can be done?
In April, Chris Binns, director of planning at Pegasus Group, wrote about headlines which questioned whether renewables were overwhelming the UK energy grid. His primary argument was that any conclusion that the UK was failing in its renewable energy policy was wide of the mark. “In reality, we have a system management challenge – one which is more manageable than meets the eye,” Binns wrote.
“Periods where renewable generation exceeds demand are not evidence that the UK is building too much clean power. They reflect a grid system that was never designed for the energy transition we’re now delivering,” Binns added.
The grid and transmission network needs major reinforcement, Binns argued. Battery storage is helpful but does not solve this wider problem. This is where the Great Grid Upgrade comes in, the largest overhaul of the electricity grid in generations. As this publication reported last month, it has been a summer of progress, with planning permission granted for three new substations across South Yorkshire and the East Midlands. NESO’s connections reform process, clearing gridlock by unlocking 381.5 GW of ready-to-build capacity, also fits in here.
Writing in its 2026 Annual Renewables Report Caroline Hulmston, UK head of renewables at business advisory firm BDO, sets the scene. “For investors and developers, these initiatives provide clearer direction, but the shift from policy to delivery will be challenging,” Hulmston wrote. “Rising project costs, long equipment lead times, supply chain pressures and skills shortages are already shaping outcomes.
“The grid is no longer just an engineering constraint; it is the backbone of policy credibility, investor confidence and energy security.”
One factor in regard to delivery is the expansion of the UK’s digital economy. The speed of development for data centres and AI is intensifying the pressure on electricity demand and, therefore, grid capacity.
Yet there are ways in which this can be seen as a positive. Writing in a piece which ultimately argues that to cut bills, Britain needs to use more electricity, not less, analysts at BCG noted that delivering 14GW of the current data centre pipeline would cut every household’s bill by £35 in 2035 ‘if done in a grid-positive way and without requiring significant new generation.’
“Britain could let projects connect faster where they locate intelligently, operate flexibly and pay the costs they cause,” the BCG analysts noted. “Four reforms can do this: non-firm connections in return for limited curtailment; a national market for powered land; developer self-build; and behind-the-meter power as a bridge to full grid capacity. Operators should also commit to specific local improvements to secure the support such a rollout needs.
“Britain is already investing heavily in its grids, but the scale and timing of electrification are uncertain,” BCG added. “Large new loads from data centres can help cover that investment.”
Hulmston argues similarly, saying that alongside behind-the-meter solutions, the pressure creates opportunities for flexible demand and on-site generation. “As microgrids, private wires and co-located renewables proliferate, the boundaries between generation, consumption and flexibility are increasingly blurred,” Hulmston wrote.
“In this context, AI is becoming a quiet enabler – improving reliability, reducing costs and supporting a more dynamic, decentralised system.”
