Buying a site or existing property comes with plenty of things to consider.

Planning, access, ground conditions, title, construction costs and development potential will usually be high on the list.

Utilities should be on that list too.

Utilities can have a real impact on whether a development is practical, how much it might cost and how quickly it can be delivered.

The difficulty is that utility problems aren’t always obvious when looking at a site.

There may be electricity infrastructure nearby, but not enough capacity for what you are planning. An existing building may already have supplies, but they may not be suitable for its future use. Utility equipment crossing the site could also affect how it can be developed.

This is where utility due diligence can help.

What is utility due diligence?

Utility due diligence is simply about understanding the utility position before making an important decision about a site or property.

The level of detail needed will depend on the project.

For an early opportunity, it might be a relatively simple review to identify any obvious risks.

For a major acquisition or development, a more detailed assessment may be needed to understand existing infrastructure, capacity, connection requirements and potential constraints.

The purpose isn’t to have every utility connection designed before buying a site.

It’s to understand what you know, what you don’t know and whether anything could cause a problem later.

Start with what is already there

One of the first things to understand is the existing utility infrastructure.

This could include electricity cables and substations, clean water mains, gas mains and existing connections serving the property.

For an existing asset, there may already be valuable infrastructure in place.

Understanding the existing supplies can help answer some fairly basic but important questions.

What serves the property today?

What capacity does it have?

Will it still be suitable for the proposed use?

Could an existing connection be retained or upgraded?

This is particularly important where a property is being refurbished, extended or changed to a different use.

An existing connection shouldn’t automatically be assumed to be suitable simply because it is already there.

Electricity capacity

Electricity is increasingly one of the most important areas to consider.

A development may need a new electricity connection, while an existing asset may need additional capacity because of a change in use, new equipment, EV charging, electric heating or future expansion.

The first step is to understand the likely electricity demand.

From there, the local network can be reviewed to build an early picture of how that demand might be supplied.

DNO capacity maps and network information can be useful at this stage, but they shouldn’t be treated as confirmation that electricity capacity is available.

A nearby substation may appear to have capacity while there are constraints elsewhere on the distribution network or further upstream.

The distribution network also connects into the wider transmission system through Grid Supply Points and associated infrastructure. Constraints at these higher levels can affect the capacity available to the DNO.

For a development that relies heavily on electricity, understanding this position early can be particularly valuable.

Don’t forget clean water

Clean water is usually less talked about than electricity, but it still needs to be considered.

The existing water network should be reviewed alongside the likely demand from the proposed development or future use of the asset.

Depending on the project, a new connection, mains extension, upgrade or other network work may be required.

Existing water infrastructure can also affect the development itself.

A water main crossing a site, for example, could influence the layout or require further investigation with the relevant water company.

The important thing is to identify these issues while there is still time to deal with them.

What about gas?

Not every new development will require gas, particularly as buildings move towards greater electrification.

But that doesn’t mean existing gas infrastructure should simply be ignored.

An existing asset may still rely on gas, or the proposed use may require it.

There may also be gas infrastructure within or close to the site that needs to be considered regardless of whether a new gas connection is required.

Understanding what is there and whether it affects the plans should form part of the wider utility review.

Are there utility assets crossing the site?

Utility infrastructure doesn’t always conveniently follow the edge of a development.

Cables, pipes and other equipment may cross land that you want to build on.

If existing infrastructure conflicts with the proposed layout, it may need to be protected or diverted.

That can affect cost and programme.

It can also influence where buildings, roads or other parts of the development can be located.

This is why utility records and available network information should be reviewed alongside the proposed site layout rather than in isolation.

A line on a utility plan may look fairly insignificant until you realise it runs directly through the footprint of a proposed building.

Will anything need to be diverted?

Where existing utility infrastructure conflicts with a development, a diversion may be required.

The cost and complexity can vary considerably depending on what needs to be moved.

A relatively straightforward local diversion is very different from relocating significant network infrastructure.

At the due diligence stage, you may not have enough information to establish an exact diversion cost.

That’s fine.

The important thing is to identify the potential issue and understand whether further investigation is needed before committing to the project.

Think about easements and wayleaves

Physical infrastructure isn’t the only consideration.

Utilities may also have legal rights associated with equipment located on or crossing the land.

Depending on the asset and circumstances, this could include easements, wayleaves or other rights of access.

These can become important if the proposed development affects existing utility equipment.

Utility records should therefore be considered alongside the legal information being reviewed by the client’s property and legal advisers.

If something doesn’t line up, it is worth investigating.

What might new connections cost?

At the early stages of a project, exact utility connection costs may not be available.

That doesn’t mean utilities should be left out of the budget.

An early assessment can help identify whether a connection is likely to be relatively straightforward or whether there is a risk of more significant infrastructure being required.

For electricity in particular, network reinforcement can have a major influence on both cost and programme.

The same principle applies to water and gas where mains extensions, upgrades or diversions are required.

The objective during due diligence is not necessarily to produce a final construction cost.

It is to identify where there could be a significant cost exposure before the project moves further forward.

Programme can be just as important as cost

A connection might be technically possible and commercially acceptable but still not be available when the development needs it.

That can be just as important as the cost.

New substations, network reinforcement, mains extensions, land rights and other utility works can take time to plan and deliver.

If the development has a fixed completion or occupation date, the utility programme needs to work alongside it.

Finding out after acquisition that a major electricity connection cannot be delivered within the expected programme can create a much bigger problem than identifying that risk beforehand.

Existing assets can present opportunities too

Due diligence shouldn’t only be about finding problems.

Existing infrastructure can also create opportunities.

A property may have more electricity capacity than its current use requires.

There may be existing connections that can be retained rather than replaced.

Infrastructure already serving an asset could potentially reduce the work needed for a future refurbishment or change of use.

For some types of occupier, access to a good electricity supply can itself be attractive.

So the question isn’t simply:

“What utility problems does this property have?”

It should also be:

“What utility infrastructure does this asset already have, and could it be useful?”

How much investigation is enough?

This depends on the project and the stage you are at.

If you are looking at several potential sites, carrying out a detailed connection application for every one of them probably wouldn’t make sense.

An early desktop review may be enough to identify which opportunities need further investigation.

As a preferred site moves closer to acquisition or development, the level of detail can increase.

That could include more detailed capacity work, discussions with utility providers or formal connection applications where the project needs greater certainty.

Utility due diligence should therefore be proportionate.

The aim is to get the right level of information at the right time.

What should you know before committing to a site?

You won’t always have every answer before an acquisition.

But ideally you should have a reasonable understanding of:

• What utility infrastructure already serves the site
• What electricity, clean water and gas infrastructure is nearby
• Whether existing supplies could be suitable for the proposed use
• What additional utility demand the project is likely to create
• Whether electricity capacity could be a constraint
• Whether new connections or upgrades are likely to be required
• Whether utility assets cross or affect the site
• Whether diversions could be needed
• Whether there are obvious utility cost or programme risks
• What further work should be carried out as the project progresses

If one of those areas presents a significant risk, you can then decide whether more detailed investigation is needed before proceeding.

Final thoughts

Utility due diligence doesn’t need to make an acquisition more complicated.

It should do the opposite.

A good assessment gives you a clearer understanding of what is already there, what the project is likely to need and where there could be issues worth investigating.

Sometimes it will identify a significant constraint.

Sometimes it will confirm that the utility position looks relatively straightforward.

And sometimes it may uncover an opportunity within an existing asset that wasn’t obvious at first.

The important thing is finding out early enough for the information to be useful.

For developers, investors and property owners, that means considering utilities before the site is bought or the design is fixed, rather than trying to solve everything afterwards.

Looking at a development, acquisition or existing asset?

norwen provides independent utility due diligence and infrastructure advice covering electricity, clean water and gas.

We help clients understand existing infrastructure, capacity, connection requirements and potential constraints so they can make informed decisions before moving forward.