IN Brief:
- Electricity demand and renewable generation kept growing, increasing pressure on networks already constrained by connection queues, reinforcement schedules and equipment lead times.
- Batteries took on more explicit transmission and congestion roles, while 800V DC power architectures advanced through new data-centre equipment and protection systems.
- Transformer, copper and electrical-steel constraints drew further manufacturing investment, long-term sourcing agreements and policy intervention during Q3.
Global electricity demand continued to rise through 2026, while renewable generation kept expanding into networks that were already contending with crowded connection queues, lengthy reinforcement programmes and increasingly constrained equipment supply. The International Energy Agency’s July mid-year update forecast global electricity demand growth of 3.6% in 2026 and expected renewable generation to overtake coal during the year. Neither development began in Q3, and the associated network pressures had already been building through the first half of 2026 and well before it, although responses became more concrete during the quarter across connection policy, storage, manufacturing and high-density power systems.
In Britain, the second quarter had already brought further connection reform, transmission planning and investment commitments, yet September’s National Audit Office assessment showed how much delivery remains unresolved. Ofgem estimates around £70 billion of transmission investment is required between 2025 and 2031, while constraint costs reached £1.9 billion in 2025-26 and could rise substantially if generation connects faster than the network can carry its output. Of the 80 transmission projects identified by NESO as necessary, 64 were under way, although many were not expected to arrive by their originally optimal dates. Against that background, Great British Energy added Great British Grid as a publicly owned investment and development vehicle alongside existing network companies, while Ofgem continued tightening connection rules for oversubscribed technologies and large loads.
Although batteries have provided frequency response, balancing and trading services for years, larger projects are increasingly being designed around congestion, system protection and transmission utilisation as well. Australia’s 850MW/1,680MWh Waratah Super Battery reached full commercial operation as part of a protection arrangement that can support higher power transfers across the New South Wales network, while RWE committed to a 400MW/1,100MWh system at Moerdijk that will use capacity steering to relieve Dutch congestion and support renewable integration. The market structures are different, but both projects tie battery operation directly to network conditions rather than relying solely on short-duration ancillary services.
While transformer and cable lead times had already lengthened sharply before Q3, September brought further investment and sourcing responses to an equipment constraint that has become increasingly difficult to separate from grid delivery. IEA analysis found that average procurement times had almost doubled since 2021 and that transformer prices had risen by around 75% since 2019. Hitachi Energy announced a $528 million transformer factory in Mississippi, while Prysmian and Aurubis expanded their long-term copper agreement. The European Commission also introduced provisional safeguards covering grain-oriented electrical steel, laminations, cores and transformers. Manufacturing expansion will add capacity, but new factories, qualified suppliers and specialist labour take time to feed through to projects already in procurement.
As data-centre demand continued to translate from forecasts into connection policy and equipment design, manufacturers advanced higher-density electrical architectures intended to move more power through smaller footprints. Ofgem said data centres represented about 73GW of the British connections queue when it consulted on reforms in July. ABB subsequently launched its Infinitus source-to-rack DC portfolio around an 800V DC architecture, while Infineon and SolarEdge extended their work on silicon-carbide solid-state circuit breakers for rapid DC fault isolation. Higher-voltage DC distribution is not replacing conventional AC systems across the market, but transformers, protection devices and rack-level power equipment are now developing around a more substantial commercial ecosystem.
While corporate PPAs are well established, large electricity users also continued moving deeper into the supply side of the system as their demand became large enough to influence generation and flexibility investment directly. Fortum and Google agreed a 22-year PPA covering up to half of the capacity of Finland’s Loviisa nuclear plant, providing long-term revenue support as Fortum plans lifetime-extension work and uprating through 2050, while a new 94MW battery will support Google’s planned Kajaani data centre. The combination links hyperscale demand with nuclear life extension, storage and prospective generation investment rather than treating the customer solely as an additional grid load.
Although the pressure points identified earlier in 2026 remained largely the same, Q3 brought more physical and institutional responses to them. Network scarcity prompted tougher queue disciplines and another grid-delivery structure, battery projects were assigned increasingly specific network functions, electrical equipment shortages drew manufacturing capital and longer-term sourcing arrangements, and high-density computing pushed power conversion and protection towards new architectures. Generation capacity continued to expand, but the pace at which it can be used increasingly depends on the hardware, connections and system controls around it.
What were Q3 2026’s biggest electrical engineering stories?
Britain adds another mechanism for grid delivery
Britain entered Q3 with connection reform and accelerated transmission planning already under way, but the gap between planning and physical delivery remained substantial. September’s NAO assessment put required transmission investment at around £70 billion between 2025 and 2031 and warned that delays could increase constraint costs as generation connects ahead of network capacity. Great British Grid subsequently added a publicly owned route for investing in and potentially developing electricity infrastructure alongside existing network companies. Ofgem, meanwhile, continued tightening queue discipline, including proposed commitment fees for an oversized battery pipeline. Substations, overhead lines, cables, transformers and skilled labour must still be designed, procured, installed and commissioned before administrative reform becomes usable electrical capacity.
Batteries take on more explicit network roles
Although grid-scale batteries were already established providers of frequency response and balancing services, Q3 added further examples of storage being designed around transmission utilisation and network security. The Waratah Super Battery reached commercial operation at 850MW/1,680MWh as part of a protection scheme intended to support higher transfers through the New South Wales network, following commissioning tests of its grid-protection capability. RWE’s 400MW/1,100MWh Moerdijk project provides a European counterpart, using capacity steering to relieve congestion while supporting renewable integration. The projects operate under different market arrangements, but both show storage being specified for network conditions alongside wholesale and ancillary-service revenues.
AI power density advances 800V DC development
Rising data-centre electricity demand has been evident for several years, but higher rack densities are forcing more detailed decisions about voltage, conversion and protection. ABB’s Infinitus portfolio combines solid-state transformation, DC distribution and protection around an 800V DC architecture intended to reduce conversion stages and electrical footprint between the grid connection and computing racks. Infineon and SolarEdge separately extended their 800V DC protection work using silicon-carbide solid-state circuit breakers designed for microsecond-scale fault isolation. Conventional AC distribution remains dominant, but Q3 added further commercial equipment around an architecture being developed specifically for much denser computing loads.
Grid equipment capacity attracts further investment
Long transformer and cable lead times pre-date 2026, and Q3’s investments responded to an established supply constraint rather than a new shortage. Hitachi Energy’s planned $528 million Mississippi transformer factory will more than double its local production capacity, while Prysmian and Aurubis strengthened long-term copper wire-rod supply as demand from grids and electrification grows. Europe also intervened upstream through provisional safeguards on grain-oriented electrical steel and products containing it. Additional manufacturing can increase future supply, although projects already in procurement remain exposed to lengthy factory schedules, specialist installation requirements and shortages of qualified electrical labour.
Google contract supports Loviisa nuclear extension
Although corporate power purchase agreements have supported generation projects for years, the 22-year agreement between Fortum and Google applies the model to nuclear lifetime extension and hyperscale computing demand. Google will contract up to half of Loviisa’s capacity, giving Fortum long-term revenue visibility as it plans uprating and operation through 2050. A separate 94MW battery beside Google’s planned Kajaani data centre adds flexibility, while the companies will explore further nuclear, renewable and power-system opportunities. The agreement connects a major new electricity load directly with investment in existing low-carbon generation and storage, extending the established trend towards large users taking a more active role in securing the capacity required for expansion.
IN answer to…
Why are electricity grid connection queues still congested?
Connection queues contain more proposed generation, storage and large electricity loads than networks can accommodate within existing delivery programmes. Some projects are commercially advanced, while others have historically retained queue positions despite uncertain readiness. Building the substations, transmission lines, cables and transformers required for viable projects can also take years, so regulators are combining physical investment with stricter milestones, commitment fees and other mechanisms intended to remove speculative capacity.
How can grid-scale batteries increase usable transmission capacity?
Batteries can respond rapidly when a fault or other contingency changes power flows across a network. When integrated with a system protection scheme, that response can allow operators to transfer more power during normal conditions while retaining fast support if a line is lost. Batteries can also charge or discharge in response to congestion, balancing requirements and wholesale prices, giving the same asset several potential system functions.
Why are AI data centres considering 800V DC power systems?
Higher computing densities require very large amounts of electricity to pass through a limited physical footprint. Raising the DC distribution voltage reduces current for a given power level, while architectures that remove some conversion stages can reduce losses and equipment requirements. Protection remains a significant engineering challenge because DC faults must be isolated extremely quickly, which is helping drive development of solid-state transformers and circuit breakers.
Why are transformers and electrical materials limiting grid expansion?
Transmission investment is increasing simultaneously across many markets, raising demand for large transformers, high-voltage cables, copper and specialised electrical steels. These components depend on specialist factories, qualified materials and skilled labour, so supply cannot expand immediately when orders rise. Lead times for large transformers and cables have lengthened substantially since 2021, leaving new manufacturing investment to address a backlog that has already accumulated.
