The UK's energy regulator, Ofgem, has introduced a proposal requiring data centre developers to provide significant upfront, refundable deposits to secure connections to the national electricity grid. Under the plan, developers would be charged between £237,500 and £712,500 per megawatt, potentially resulting in costs reaching hundreds of millions of pounds for large-scale projects.
This initiative aims to address a dramatic rise in grid connection requests, which have climbed from 41 GW to 125 GW over the past year—a figure substantially higher than Britain's 2025 peak electricity demand of approximately 46 GW. Ofgem stated that the measure is designed to prevent speculative projects from occupying limited network capacity without a concrete commitment to proceed. To retain their position in the connection queue, developers would also be required to meet specific project milestones.
The growth of data centres, driven by the increasing demand for artificial intelligence infrastructure, has faced public opposition in various regions due to concerns regarding noise, water usage for cooling, and overall electricity consumption. Currently, there are 564 data centres in the UK, with additional projects in development, particularly in Scotland where renewable energy resources are abundant.
Eleanor Warburton, Ofgem’s director for energy system design and development, emphasized that the current queue has tripled in size, noting that "consumers should not bear the risks created by speculative projects." Energy minister Michael Shanks supported the move, stating it would help "viable connection-ready projects" move forward without being obstructed by speculative applications. A consultation on the proposal is open until 16 September.
Source: BBC News
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