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Ofgem proposes upfront fees for UK data centers to access grid capacity
Ofgem said there are 315 data centers in the connection queue totaling 73GW of demand, nearly 30GW above the country’s 45GW peak.
Britain’s energy regulator Ofgem said data center projects may need to provide significant upfront fees or financial security to secure electricity grid connections as the UK tries to ease a growing backlog. The plan would require providers to lodge money when they receive a connection offer, with the funds returned once a data center is switched on.
Ofgem outlined measures aimed at filtering speculative proposals, including hard milestones tied to securing customers and financial backing. Under the approach, projects that do not meet required targets during the connection application process would be removed from the queue, and Ofgem said the goal is to direct limited grid capacity to projects most likely to be built.
The regulator linked the proposals to constraints on power access that it said threaten the pace of data center development tied to the UK’s AI ambitions. Ofgem said data centers are central to AI tools like chatbots but have increasingly large energy needs as usage and capability expand.
Ofgem also cited updated demand figures, saying 315 data centers are currently queueing to connect, representing 73GW of demand. It added that the figure is almost 30GW above the country’s entire peak energy demand of 45GW, and said there were 140 proposed data centers with energy demands of 50GW, with both numbers rising since an earlier February update.