For logistics development, the right location is no longer defined by roads, labour and market access alone. Increasingly, it is defined by whether enough electricity can be secured, at the right cost and at the point an occupier needs it. A site may be well connected, allocated and commercially attractive on paper, but without a viable power connection it may still be undeliverable.
The availability of power is becoming a critical challenge for both the logistics market and the planning system. Local Plans can identify employment land, establish the principle of development and direct growth towards strategic transport connections. But an allocation does not guarantee that the infrastructure needed by modern occupiers will be available within a commercially realistic timeframe.
Modern logistics buildings are increasingly power intensive. Automation and robotics are transforming warehouse operations, refrigeration creates substantial energy demand, and the shift towards electric vehicle fleets requires extensive charging infrastructure. As occupiers invest in more sophisticated facilities, the availability, cost and timing of power are now key development considerations, even before a site is acquired.
At the same time, logistics is competing for grid capacity and well-connected, power-rich sites with the rapidly expanding data centre sector. The relationship is complex from a real estate context as logistics supports the construction and operation of data centres, yet the two sectors also compete for many of the same sites and electricity connections.
If electricity infrastructure is now shaping where businesses can locate and invest, it must play a much greater role in how we plan for employment growth. Without a realistic route to power, the locational advantages of an allocated (or “zoned”) site can quickly fall away.
How can the planning system help?
Clearly, the planning system cannot create grid capacity nor can planners solve the wider challenges facing the UK's electricity network. But Planning can become much better at recognising the extent to which energy infrastructure now influences whether development can actually happen.
Power needs to become a strategic planning consideration much earlier in the process, at plan making stage. Employment Land Assessments and Local Plans have traditionally considered factors including market demand, transport accessibility, labour supply and environmental constraints when deciding where employment growth should be directed. Infrastructure requirements are part of that process, but the changing nature of the logistics sector means electricity availability increasingly needs to be treated as a fundamental aspect of deliverability.
This does not mean every site allocation needs a guaranteed power connection before it appears in a Local Plan. Infrastructure capacity and likely timescales should form part of the evidence used to understand whether strategic employment sites can realistically be brought forward. There is little value in allocating substantial areas of employment land if a fundamental piece of infrastructure required by future occupiers cannot be delivered within the development programme. An allocation on a plan is not the same thing as a deliverable site.
Another consideration is flexibility in planning policy. The NPPF requires flexible policies to allow for changing market forces or economic needs, but policy should also be able to respond to changing infrastructure locations and needs. Traditional assumptions about the optimum locations for logistics have been heavily influenced by access to major roads, population centres and labour. Those factors remain critical, but Planners and Local Plans now need to take a broader view of what constitutes a sustainable and commercially realistic location, given that access to power has become a significant constraint.
This is not an argument for allowing logistics development to be located wherever grid capacity happens to exist. Sites need to be assessed against the full range of infrastructure that modern occupiers actually require. In some circumstances, alternative locations may offer a better overall combination of power, transport connectivity, labour and deliverability than sites identified using more traditional criteria.
We are now seeing developers take the problem into their own hands by integrating energy infrastructure into schemes from the outset. On site renewable generation, battery storage, substations and other energy infrastructure should increasingly be viewed as integral components of modern employment development rather than technical matters addressed towards the end of the design or planning process.
That has implications for everything from land requirements and masterplanning to design and landscape strategies. Providing space and flexibility for energy infrastructure at the outset should make it easier for schemes to respond as occupier requirements and technologies evolve.
Going forward, we need much greater coordination between land use planning and infrastructure planning. Developers inevitably have a responsibility to engage with network operators early and understand the power requirements of prospective occupiers. Local planning authorities also need a clearer strategic understanding of where infrastructure capacity exists, where investment is anticipated and where constraints could affect the delivery of their economic growth strategies.
Network constraints need to inform plan making, infrastructure strategies and discussions about the location of future employment land.
The industrial and logistics sector is evolving quickly and the planning system needs to evolve with it. Planners cannot solve the UK's electricity capacity challenges, but we can make sure that decisions about where growth should happen recognise the infrastructure required to make that growth possible.
In an increasingly electrified sector, planning for employment land and planning for power can no longer be treated as separate exercises. If access to power is becoming fundamental to whether employment development can actually happen, it also needs to become fundamental to how we plan for it. Otherwise, in some locations, we are allocating employment development on what may be undeliverable sites for the foreseeable future.