NPM’s 2026 edition of its UK Development & Finance Forum once again found an industry at the mercy of NESO’s protracted grid reform process, which will be little surprise to those active in renewables.

However, there was more than a note of the debate moving on as leading practitioners congregated at Gowling WLG’s London offices on November 4.

Amid continued regulatory questions across several strands emanating from central government, and before the contentious issue of grid connections was fully addressed, delegates were given an opportunity to learn more about one developing state intervention in the market, courtesy of a keynote address from Great British Energy’s (GBE) Matt Porter.

“Our investment mandate requires GBE to go further and invest earlier [compared to predecessor Green Investment Bank]. GBE is primed to take development risk, which was a strong feature of our investment earlier this year in the Pentland floating wind project.

“Success for us will be co-development with the IPP, development and finance community,” said Porter.

Development: grid uncertainty still holding up investment

Following on from the keynote, the initial panel of the day tackled the development landscape in the UK, with speakers highlighting the difficulties in aligning financing, procurement and supply chains with grid connection dates that remain uncertain.

“Until you have an actual deliverable project with a target date, you can’t take that to investment committee. The reform is asking the sector to take blind investment on bigger ticket items and development risk. At some point investors will say, ‘my appetite for risk is running low’,” said Keila Abreu, Electric Land.

Quinbrook’s Ervin Duva meanwhile stressed that accelerating planning would only solve part of the problem.

“It’s become a bit challenging to see massive changes in the planning system and, especially with onshore wind, planning takes a huge amount of time. Expediting planning is critical but it needs to be in conjunction with grid and procurement,” he said.

Offtake: protect CfD bankability

The second panel turned to the evolving PPA and CfD landscape, including the potential consequences for financing from changes to the UK’s flagship Contracts for Difference (CfD) renewable energy support mechanism.

Guy Lavarack of Luminous Energy cautioned against reforms that undermine the revenue certainty underpinning project finance.

“One of the fantastic things CFD offers is underwriting revenue risk, so reforms need to maintain that [for bankability] as lower gearing means more equity and higher cost of capital.”

Octopus Energy Generation’s James Zhou was positive on the depth of the wider UK offtake market, but warned against assuming co-located batteries can provide a straightforward solution to revenue risk for renewables generation assets.

“We are seeing a lot of pipeline coming through with batteries co-located. It’s helpful but not a silver bullet. Inherently, battery revenues are very volatile and prone to cannibalisation themselves and those risks aren’t as easy to offload as they are for wind and solar assets,” said Zhou.

Data centres: time to power becomes critical

Data centres provided a different perspective on the grid debate, with rapidly growing power requirements from AI and digital infrastructure creating opportunities for developers able to secure suitably located capacity.

“Key aspect is time to power. On that front, the UK can be interesting. It has a reputation of being friendly to business and lots of hyperscalers are already located here,” said Telis Energy’s Adrien Pinsard.

Nomura Greentech’s Dmitry Golubikhin said the challenge is also driving greater interest in sites with existing power infrastructure.

“Creative approaches of companies to access power [is something] we see broadly across Europe. People now value quite a lot brownfield situations, or powered land which originally was purposed for something different,” he said.

BESS: lenders adapt to greater merchant exposure

The event’s UK battery storage panel focused on tolling, merchant exposure, financing and the potential impact of policy intervention.

Fidra Energy’s Tony Julius suggested lenders are already becoming increasingly comfortable with projects retaining merchant exposure.

“One of the advantages we have is we can split projects into various ‘arrays’ which means you can play different tunes with revenues [including tolling agreements and merchant]. The sweet spot is roughly 50% contracted which is something we found lenders would take but also left that equity upside.

We’ve found as the market becomes more competitive… lenders are willing to lend into lower contracted revenues,” said Julius, adding that such structures still allow for 60%-70% leverage.

But Gowling WLG’s Gareth Baker cautioned that continued policy change risks complicating investment and financing decisions.

“There’s been a lot of tinkering, we just need a period now with visibility, where we all know what is happening and what we’re doing.”

Zenobe’s Tom Palmer also cautioned against unintended consequences from allowing battery storage projects (of at least eight hours’ duration) to participate in the UK’s Long Duration Energy Storage (LDES) programme, given the UK BESS market has to date evolved and thrived without a need for such overt government support.

Capital markets: money available, but increasingly selective

The final panel turned to financing and M&A, with speakers pointing to plenty of capital remaining available for strong projects, but increasing selectivity around risk, project maturity and scale.

Econergy’s Silvia Calvo Alcala said grid reform is now contributing to a large number of opportunities reaching the market, but that the company remains disciplined around development risk.

“It’s now harder to be opportunistic, [but] in this business there’s also the risk of being late. With grid reform there are so many deals out there at the moment which we are looking at of course…but we are not taking so much risk; we take risk, of course, but we are very careful.”

It may be a buyer’s market for assets, but the permitting landscape means that due diligence is more important than ever.

A number of panellists across the day concurred that uncertainty or even the absence of a grid connection date doesn’t prevent a successful sale. However, rigorous discussions around mitigation and risk-sharing are more important than ever.

“Everyone is a grid expert now. We all know about queues, costs and delays, but in practice sometimes project development is more art than science,” said Julia Gubar, Octopus.

The renewables M&A market remains healthy at least in part because of this gap between development and delivery. Lenders and sponsors alike are keen to support diverse, flexible portfolios that can balance the winners and losers.

“Capital recycling is fundamental, even for the big utility companies these days. Projects are getting bigger and bigger and lead times are longer than ever,” said Gauri Kasbekar-Shah, Siemens Bank.

The day’s debates left the distinct impression that the UK market is one where capital and investor appetite remain, but where grid certainty, stable regulation and project maturity are becoming increasingly important determinants of which projects actually get financed and built.