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Ofgem proposes deposits for data centers seeking grid connections
The regulator says connection requests have jumped from 41 GW to 125 GW in a year, with fees refundable if projects complete.
Britain’s energy regulator Ofgem has proposed new deposit requirements for developers of data centers that want to connect to the electricity grid, aiming to curb what it called speculative applications for scarce capacity. Under the plan, developers would pay a refundable fee of between £237,500 and £712,500 per megawatt. Ofgem says a data center seeking 1 gigawatt (GW) of power could face hundreds of millions of pounds in deposits upfront, with the money paid back if the project is completed.
Ofgem linked the proposal to rapidly rising demand for grid connections as the artificial intelligence boom increases electricity needs for large data center operators. It said the amount of capacity requested by projects seeking to connect rose from 41 GW to 125 GW over the past year, more than double Britain’s peak electricity demand in 2025 of around 46 GW.
The regulator also said developers would need to meet key milestones to keep their place in the connection queue, which it described as surging. Ofgem is running a consultation on the measures until 16 September, following public opposition in parts of the country over noise, power demand, and cooling water use for high performance chips.