Data centres could be forced to pay millions of pounds to Ofgem in order to secure their spot in the queue of new connections to the energy grid.
The past few years have seen the number of data centres explode due to the advent of AI technologies, which has caused strain on electricity grids around the world.
According to Ofgem figures, between November 2024 and June 2025 contracted demand in the connection queue increased from 41GW to 125GW, of which 73GW was attributed to data centres. For a sense of scale, peak demand in Great Britain in 2025 was 45GW.
Historically, the UK grid has operated on a ‘first-come, first-served’, basis with very long wait times. Because of this, data centre developers have resorted to speculative booking. For example, a developer might want to build one 500MW data centre, but to hedge their bets, they will apply for grid connections at five different locations across the UK knowing that they are likely to be rejected for planning permission from many of them...