Unlocking Grid Capacity Without Building New Infrastructure

The electricity grid is running out of room. Across the industrialised world, the queue to secure new grid connections—or to upgrade existing ones—has grown from months to years. In the United Kingdom, the average wait time for a new high-voltage grid connection now exceeds five years. In Germany, grid operators report backlogs stretching to 2030 and beyond. In the United States, the interconnection queue held over 2,000 GW of proposed capacity at the end of 2023, with average processing times of nearly five years—double the figure from a decade earlier.

The causes are well documented: surging demand from data centres, the electrification of transport and heating, the connection of renewable generation, and decades of underinvestment in grid infrastructure. The conventional response—build more substations, lay more cables, upgrade more transformers—is necessary but painfully slow. New transmission lines take seven to twelve years from planning to energisation. Distribution network reinforcement is faster but still measured in years, not months.

What is far less discussed is the capacity that is already connected but being wasted. At most industrial facilities, reactive power and harmonic distortion consume a significant fraction of the available grid connection—typically 15 to 30 percent—without delivering any useful work. That capacity is paid for, connected, and physically present. It is simply being used inefficiently.

This article examines how power quality optimisation can unlock latent capacity within existing grid connections, avoiding the need for infrastructure upgrades while enabling the electrification that decarbonisation demands.

Section 01

The scale of the grid connection backlog is difficult to overstate. It represents one of the most significant bottlenecks to industrial growth, electrification, and decarbonisation in the developed world.

In the United Kingdom, National Grid ESO reported in 2023 that the transmission connection queue contained over 176 GW of projects—more than three times the current peak demand. At the distribution level, UK Power Networks, the largest distribution network operator, has flagged that many substations in the south-east of England are operating at or near capacity. New connections for commercial and industrial loads routinely require reinforcement works that add two to five years and six- to seven-figure costs to the process. The Energy Networks Association reported that 56% of grid connection applications in 2023 required some form of network reinforcement before they could proceed.

In Germany, the Federal Network Agency (Bundesnetzagentur) estimates that the country needs 12,500 km of new transmission lines by 2030 to accommodate the Energiewende. As of early 2025, fewer than 2,500 km had been completed. At the distribution level, the German Association of Energy and Water Industries (BDEW) has warned that grid operators are struggling to process connection requests from heat pumps, EV chargers, and industrial electrification projects simultaneously.

In the United States, Lawrence Berkeley National Laboratory found that the average time from interconnection request to commercial operation reached 5.0 years in 2023, up from 2.4 years in 2010. The queue is dominated by solar, wind, and battery storage, but industrial load growth—particularly from data centres—is adding pressure. PJM Interconnection, the grid operator covering 13 eastern states, paused new interconnection studies for nearly two years to clear its backlog.

For an industrial facility that needs additional grid capacity—whether to install EV charging infrastructure, electrify a gas-fired process, or add a new production line—the message from grid operators is increasingly the same: wait. The reinforcement works are expensive, the timelines are long, and the queue is growing faster than it can be cleared.

But what if the capacity is already there?

Section 02

Every industrial grid connection is rated in kilovolt-amperes (kVA)—apparent power, not real power. A facility with a 2 MVA transformer connection has 2,000 kVA of capacity available. But the useful power that this connection can deliver depends entirely on the facility’s power factor.

Power factor is the ratio of real power (kW) to apparent power (kVA). A power factor of 1.0 means every amp of current flowing through the connection is doing useful work. A power factor of 0.80 means that only 80% of the apparent power is productive—the remaining 20% is reactive power, drawn from the grid to sustain electromagnetic fields in motors, transformers, and inductive loads but contributing nothing to output.

The arithmetic is straightforward:

• A 2 MVA connection at power factor 1.0 delivers 2,000 kW of useful power.
• The same connection at power factor 0.85 delivers only 1,700 kW—a loss of 300 kW.
• At power factor 0.80, it delivers 1,600 kW—a 400 kW shortfall.
• At power factor 0.70, it delivers just 1,400 kW—600 kW of the connection is consumed by reactive current.

That 400 kW shortfall at a power factor of 0.80 is not theoretical. It is real capacity—cable capacity, transformer capacity, switchgear capacity—that is being occupied by non-productive current. The cables are heating. The transformer is loaded. The protection systems are measuring current. But 20% of that current is doing nothing useful.

Surveys of industrial power quality consistently reveal that many manufacturing facilities operate with displacement power factors between 0.75 and 0.88. The IEEE Power Engineering Society has noted that large motor-driven loads—which dominate industrial consumption—typically operate at power factors of 0.80 to 0.85 at rated load, falling to 0.50 to 0.65 at partial load (IEEE Std 141-1993). Since most motors are oversized for their actual duty and spend significant time at partial load, facility-level power factors below 0.85 are common.

The implication is clear: at a typical industrial facility operating at a power factor of 0.82, roughly 18% of the grid connection capacity is consumed by reactive power. Improving that power factor to 0.97 or above would recover most of that capacity—the equivalent of a significant grid connection upgrade, achieved without any network reinforcement, without any new cables or transformers, and without waiting in any queue.

Section 03

Reactive power is not the only source of wasted capacity. Harmonic distortion—the presence of currents at frequencies above the fundamental 50 or 60 Hz—imposes an additional and often underappreciated burden on electrical infrastructure.

Harmonic currents are generated by non-linear loads: variable-frequency drives (VFDs), rectifiers, LED lighting drivers, uninterruptible power supplies (UPS), arc furnaces, and switched-mode power supplies. These devices draw current in sharp pulses rather than smooth sinusoidal waves, injecting harmonic frequencies—typically the 3rd, 5th, 7th, 11th, and 13th—into the electrical network.

The problem is that harmonic currents cause disproportionate heating in electrical infrastructure. In transformers, harmonics increase both eddy-current losses and stray losses. IEEE Std C57.110-2018 provides the standard methodology for calculating the impact: the harmonic loss factor increases with the square of the harmonic order, meaning that high-frequency harmonics are far more damaging per amp than the fundamental current.

The practical consequence is transformer derating. A transformer operating in an environment with significant harmonic distortion cannot safely deliver its full nameplate capacity, because the additional heating from harmonics reduces its thermal headroom. The degree of derating depends on the harmonic spectrum, but the following guidelines are representative:

• At 10% total harmonic distortion (THD) in current, a typical dry-type transformer may need to be derated by 5–10%.
• At 20% THD, derating of 10–15% is common.
• At 25% THD, derating of 15–20% may be required.
• At 35% THD and above, derating can exceed 25%, and the risk of insulation degradation and premature failure increases significantly.

These figures are not hypothetical. A 2019 survey of industrial facilities in the IEEE Transactions on Industry Applications found that current THD levels above 20% were present at over 40% of sites with significant VFD penetration. The proliferation of power electronic loads in modern industry—VFDs now represent over 30% of industrial motor drive installations globally, according to IHS Markit—means that harmonic distortion is increasing, not decreasing.

Harmonics also increase losses in cables. The skin effect and proximity effect cause conductor resistance to rise at higher frequencies, meaning that harmonic currents generate more heat per amp than the fundamental. For cables carrying significant harmonic content, the IEC 60364 standard recommends derating factors that can reduce the effective current-carrying capacity by 10 to 20 percent.

The result is that harmonics and reactive power are compounding the capacity problem. A facility with both a poor power factor and high harmonic distortion is losing capacity to two separate mechanisms simultaneously—and the combined effect can be severe.

Section 04

To make the scale of the opportunity concrete, consider a worked example for a representative industrial facility.

Scenario: A manufacturing site with a 3 MVA grid connection, operating at a displacement power factor of 0.82 and a current total harmonic distortion of 18%. The facility is considering installing 500 kW of EV charging infrastructure and a 200 kW electrified heating process, but has been told by the distribution network operator that a connection upgrade is required—at a cost of £350,000 and a lead time of three years.

Let us walk through the calculation step by step.

Step 1: Reactive power losses. At a displacement power factor of 0.82, the facility draws 3,000 kVA of apparent power but only 2,460 kW of real power (3,000 × 0.82). The remaining 540 kVA is reactive power—current flowing through the cables and transformer but performing no useful work. Correcting to a power factor of 0.97 raises usable power to 2,910 kW—a gain of 450 kW from power factor correction alone.

Step 2: Harmonic derating. At 18% current THD, the transformer must be derated per IEEE C57.110. The harmonic loss factor depends on the specific harmonic spectrum, but for a typical industrial profile dominated by 5th and 7th harmonics, a 12% derating is representative. This reduces the effective transformer capacity from 3,000 kVA to approximately 2,640 kVA. After power quality optimisation reduces THD to 5%, the derating becomes negligible—effectively restoring the full 3,000 kVA nameplate capacity.

Step 3: True power factor. The true power factor accounts for both displacement (reactive power) and distortion (harmonics). It is calculated as the product of the displacement power factor and the distortion power factor: True PF = DPF × (1 / √(1 + THD²)). At 0.82 DPF and 18% THD, the true power factor is approximately 0.79. After optimisation (0.97 DPF, 5% THD), the true power factor rises to approximately 0.96.

Step 4: Effective usable capacity. Combining both effects, the facility recovers 796 kW of usable capacity—more than enough to accommodate the planned 500 kW of EV charging and 200 kW of electrified heating without any grid connection upgrade.

The connection upgrade that would have cost £350,000 and taken three years is no longer required. The facility achieves its electrification objectives within its existing infrastructure envelope.

Section 05

The worked example above is not unusual. Across a wide range of industrial sectors, the pattern repeats: facilities that believe they have exhausted their grid connection capacity are, in reality, wasting a significant fraction of it on reactive power and harmonics.

The practical applications of recovered capacity span the full range of industrial electrification challenges.

EV charging infrastructure

Workplace and depot EV charging is one of the fastest-growing sources of new electrical load. A fleet operator electrifying 50 delivery vehicles needs approximately 300–500 kW of charging capacity, depending on the charging profile. For many facilities, this is enough to push their existing grid connection to its limit—or past it. Recovering 400–800 kW of wasted capacity through power quality optimisation can accommodate the entire charging installation without a connection upgrade.

Process electrification

The replacement of gas-fired heating, drying, and thermal processes with electrical alternatives is central to industrial decarbonisation. Heat pumps, infrared heating, induction heating, and electric boilers all require significant electrical capacity. A food processing facility replacing a gas-fired pasteurisation system with an electric alternative may need 200–400 kW of additional capacity—capacity that can often be found within the existing connection.

Production expansion

New production lines, additional compressors, expanded automation systems—any production expansion requires electrical capacity. The alternative to power quality optimisation is a grid connection upgrade: submitting an application to the DNO, waiting for a design study, paying for reinforcement works, and enduring a construction period that may shut down or constrain production. Recovering capacity from within the existing connection avoids all of this.

On-site generation and storage

Battery energy storage systems (BESS) and on-site solar installations both require grid connection capacity for import and export. A 500 kW/1 MWh battery system intended for demand management and grid services needs 500 kW of available capacity at the point of connection. Power quality optimisation can create the headroom to install these assets within the existing grid infrastructure.

Section 06

The capacity benefits of power quality optimisation are not limited to individual facilities. When aggregated across the industrial base, the numbers become significant at the grid level.

The International Energy Agency estimates that industry accounts for approximately 42% of global electricity consumption. In the European Union, industrial electricity demand was approximately 1,050 TWh in 2022. In the United Kingdom, industrial and commercial sites account for roughly 60% of electricity demand.

Consider the UK as a case study. According to data from the Department for Energy Security and Net Zero, there are approximately 330,000 commercial and industrial electricity supply points at the higher-voltage tiers (above 70 kVA). Assume conservatively that the average connected capacity across these sites is 500 kVA—a figure that reflects the mix of small commercial premises and large industrial facilities. This gives a total industrial connected capacity of approximately 165 GVA.

If the average facility is wasting 20% of its connection capacity on reactive power and harmonics—a conservative figure given the data—then the total wasted capacity across the UK industrial base is approximately 33 GVA. At a representative power factor of 0.90, that equates to roughly 30 GW of real power capacity that is connected but not being used productively.

Now apply a realistic optimisation scenario. If just 10% of UK industrial sites implemented comprehensive power quality optimisation, recovering an average of 20% of their connection capacity, the aggregate capacity recovered would be approximately 3 GW—equivalent to the output of two large nuclear power stations or six major offshore wind farms.

This capacity is not speculative. It does not require planning permission, construction, or grid reinforcement. It exists within infrastructure that has already been built, connected, and paid for. It simply needs to be recovered.

The economics for grid operators are equally compelling. Network reinforcement in the UK distribution network costs between £40 and £120 per kW of additional capacity, depending on the voltage level and the degree of work required. At an average of £60/kW, the 3.1 GW of recoverable capacity represents approximately £186 million in deferred or avoided network reinforcement.

Scaled globally, the potential is an order of magnitude larger. The IEA has estimated that global grid investment needs to reach $600 billion per year by 2030, up from $330 billion in 2022. Every gigawatt of capacity recovered from existing connections is a gigawatt that does not need to be built, permitted, and connected from scratch.

There is a further systemic benefit. When industrial facilities improve their power quality, the reduction in reactive current and harmonic pollution benefits the wider network. Neighbouring facilities experience fewer voltage fluctuations. Distribution transformers run cooler and last longer. System losses decrease. The quality of supply improves for all connected parties.

This is not a zero-sum intervention. It is a positive-sum one. The facility that improves its power quality recovers capacity for its own use, reduces its own costs, and simultaneously reduces the burden it imposes on the shared network.

The demand-side role in grid planning

Grid operators are increasingly recognising that demand-side measures can play a meaningful role in relieving network constraints. In the UK, Ofgem’s RIIO-ED2 framework explicitly incentivises distribution network operators to pursue non-build alternatives to traditional reinforcement. Flexibility services, demand response, and energy efficiency are all part of this framework. Power quality optimisation fits naturally within this paradigm: it reduces a facility’s effective demand on the network without reducing its productive output.

Some DNOs have begun to consider power factor improvement as a condition of granting new connections or capacity increases, recognising that a facility with excellent power quality imposes less burden on the network than one with poor power quality, even if both have the same productive load. This represents a shift from the traditional model—where grid capacity was simply built to meet whatever demand was presented—to one where efficient use of existing capacity is valued alongside new construction.

For industrial facilities, this shift creates both an opportunity and an imperative. The opportunity is to recover capacity quickly and at a fraction of the cost of a connection upgrade. The imperative is that grid operators are becoming less willing to accommodate inefficient loads. Facilities that address their power quality proactively will find it easier to secure additional capacity, negotiate connection terms, and participate in flexibility markets. Those that do not may find themselves at the back of an increasingly long queue.

A bridge to the grid of the future

The grid reinforcement that the world needs will take decades to complete. In the interim, every watt of capacity recovered from existing connections is a watt that can be put to productive use—powering EV chargers, electrifying industrial processes, supporting on-site renewables, and enabling the growth that the economy demands.

Power quality optimisation is not a substitute for grid investment. The long-term build-out of transmission and distribution infrastructure is essential and must accelerate. But it is a bridge—a means of creating capacity now, within infrastructure that already exists, while the longer-term solutions are planned, financed, and built.

The capacity is there. It always has been. The question is whether it will be recovered and put to productive use—or continue to be consumed by reactive currents and harmonic waste that serve no purpose at all.

References

1. International Energy Agency (2023), Electricity Grids and Secure Energy Transitions, IEA, Paris. Available at: iea.org.
2. Rand, J. et al. (2024), “Queued Up: Characteristics of Power Plants Seeking Transmission Interconnection as of the End of 2023,” Lawrence Berkeley National Laboratory, April 2024.
3. National Grid ESO (2023), Connections Reform: Second Minded To Decision, Warwick, UK.
4. IEEE Std C57.110-2018, IEEE Recommended Practice for Establishing Liquid-Immersed and Dry-Type Power and Distribution Transformer Capability When Supplying Nonsinusoidal Load Currents, Institute of Electrical and Electronics Engineers.
5. IEEE Std 141-1993 (Red Book), IEEE Recommended Practice for Electric Power Distribution for Industrial Plants, Institute of Electrical and Electronics Engineers.
6. IEEE Std 519-2022, IEEE Standard for Harmonic Control in Electric Power Systems, Institute of Electrical and Electronics Engineers.
7. Desmet, J. et al. (2019), “Survey of Harmonic Distortion in Industrial Low-Voltage Networks,” IEEE Transactions on Industry Applications, vol. 55, no. 4, pp. 3539–3548.
8. Ofgem (2022), RIIO-ED2 Final Determinations: Overview Document, Office of Gas and Electricity Markets, London.
9. Energy Networks Association (2023), Connections: Industry Insights Report, London.
10. Bundesnetzagentur (2024), Monitoring Report 2024: Developments in the German Electricity and Gas Markets, Bonn.