Balfour Beatty Targets UK Grid Boom With £2.1B Power Transmission Order Book

Key Points

• Balfour Beatty’s UK power transmission order book grew to £2.1 billion, up from £1.6 billion, while first-half revenue reached £366 million—more than double its 2023 level.
• The company sees a major, multiyear UK grid investment cycle, with approximately £80 billion–£85 billion of confirmed spending through 2031 and a further £60 billion–£70 billion of potential opportunities afterward.
• Balfour Beatty is expanding delivery capacity through long-term frameworks with National Grid, SSE and ScottishPower, workforce recruitment and increased manufacturing output, while targeting a market share of at least 25% among its three main customers.

Balfour Beatty LON: BBY outlined plans to expand its UK power transmission business, citing a multiyear investment cycle in electricity networks, long-term frameworks with major network owners and continued spending on workforce, manufacturing and specialist equipment.

Group Chief Executive Philip Hoare said power transmission is a central part of the company’s UK energy growth strategy. Balfour Beatty operates primarily in the UK and US, with its selected markets including UK energy, defence and transport, alongside US buildings. Hoare also said the group’s planned divestment of its Hong Kong business, Gammon, would support a sharper focus on the UK and US.

The company said the UK power transmission market is expected to grow at a 20% compound annual growth rate over the next five years, based on clients’ published spending plans. Balfour Beatty reported first-half revenue from the business of £366 million, more than double its 2023 level, and an order book of £2.1 billion, compared with £1.6 billion at the end of the prior year.

Network spending outlook

Nick Crossfield, divisional CEO for UK Defence, Power and Regional Infrastructure, said the company’s current work is concentrated in transmission networks, covering overhead lines, cabling and substations. He said approximately 80% of its power transmission and distribution activity is in this area, while high-voltage direct-current converter stations, interconnectors and local distribution networks represent additional growth opportunities.

Crossfield attributed demand to decarbonisation targets, the need for greater grid resilience, growing electricity consumption from transport and industrial processes, renewable generation in remote areas, aging infrastructure and rising demand from data centres.

He said National Grid is considering investment of around £30 billion to £35 billion through 2031, while SSE has identified roughly £29 billion to £30 billion and ScottishPower has identified approximately £12 billion to £13 billion. Across the market, Balfour Beatty cited £80 billion to £85 billion of confirmed investment through 2031, followed by a further £60 billion to £70 billion of prospective opportunity beyond that period.

Crossfield said more than 40 projects valued collectively at about £33 billion have already been identified beyond 2031. “This is a commitment for us that extends out to 10-15 years,” he said.

Funding and customer frameworks

Ian Smith, new business and strategy director for Balfour Beatty’s power business, said network projects are funded from regulated network owners’ balance sheets rather than through UK Treasury allocations. The investment plans are reviewed by energy regulator Ofgem, which assesses consumer value and agrees allowed returns with network operators.

Smith said the RIIO regulatory framework provides investment certainty through five-year periods. The current transmission period, RIIO-T3, began in April 2026 and runs to 2031, while the next distribution period, RIIO-ED3, is due to begin in 2028.

He also highlighted the Accelerated Strategic Transmission Investment, or ASTI, process, which is designed to speed approvals for major transmission schemes and allow earlier funding for design, engineering and procurement. Smith said early procurement is particularly important because lead times are lengthening for equipment including conductors and substation components.

Balfour Beatty said it has secured access to long-term frameworks with National Grid, SSE and ScottishPower across overhead lines, cables, substations and converter stations. Smith said the arrangements give contractors greater visibility over future work and support investment in local supply chains, training and delivery capability.

Workforce and delivery capability

Tony Wilson, managing director of UK Power Transmission and Distribution, said Balfour Beatty has 550 designers across the UK and India, integrated with construction teams, and the largest specialist transmission plant holding in the industry. He also pointed to the company’s in-house steel manufacturing business, Painter Brothers, which produces towers, gantries and substation structures.

Painter Brothers has expanded from 45 operatives to more than 100 and increased output from 5,000 tonnes to 10,000 tonnes, according to Wilson. The business is targeting 15,000 tonnes of production and further factory expansion.

Wilson said Balfour Beatty has recruited more than 1,700 people over the past three years, including 700 during the current year through the end of September, a figure he expects to rise to around 800. The company operates training facilities in northeast Scotland, Derby and, following a recent agreement with ScottishPower, Glasgow.

The company said its workforce planning model tracks approximately 2,500 people and projects that its combined direct and supply-chain workforce could rise from around 3,200 to as many as 6,000. Wilson said Balfour Beatty is recruiting workers with transferable skills from sectors including oil and gas, highways and rail.

Among its current and upcoming projects, Balfour Beatty cited the Woolavington substation in Somerset, the Netherton Hub in northeast Scotland, projects in Argyll, and the Beauly-to-Peterhead overhead line scheme. The latter includes 620 towers across 187 kilometres, Wilson said.

Hoare said Balfour Beatty aims to maintain or exceed its approximately 25% market share with the three principal network-owner customers. He added that the power business, within the group’s support services segment, is expected to remain in the “high eights to low nines” margin range.

About Balfour Beatty (LON:BBY)

Balfour Beatty is a leading international infrastructure group. With 26,000 employees across the UK, US and Hong Kong, we're leading the transformation of our industry to meet the challenges of the future. Trusted by our customers to deliver sustainable solutions and strengthen communities, we finance, develop, build, maintain and operate the increasingly complex and critical infrastructure that supports national economies and deliver projects at the heart of local communities. Collaborating with governments, our customers and partners, we deliver powerful new solutions, shape thinking, create skylines and inspire a new generation of talent to be the change-makers of tomorrow.

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