Data centre developers could be required to pay hundreds of millions of pounds upfront under new Ofgem proposals aimed at managing growing demand for connections to Britain’s electricity grid, BBC News reported.
The energy regulator has opened a consultation on plans for a refundable charge for projects seeking to connect to the network. Ofgem said developers could be asked to pay between £237,500 and £712,500 per megawatt, meaning a data centre requesting 1 gigawatt of power could face an initial payment running into the hundreds of millions. The money would be returned if the project was completed.
The consultation is due to run until 16 September. Ofgem said requested electricity capacity from projects seeking grid connections had increased from 41 GW to 125 GW in the past year. That figure is far above Britain’s peak electricity demand in 2025, which was around 46 GW.
The regulator said projects would need to meet key milestones to retain their position in the grid connection queue. It said the proposals were intended to address speculative schemes reserving limited network capacity without a firm intention to connect.
Eleanor Warburton, Ofgem’s director for energy system design and development, said Britain’s electricity demand connections queue had more than tripled in less than a year, adding that consumers should not carry the risks created by speculative projects taking up space in the system.
Energy minister Michael Shanks, from the Department for Energy Security and Net Zero, said Ofgem’s action would help ensure viable projects ready to connect were not delayed by speculative applications. He said Britain needed a grid connections system suited to the 21st century that allowed businesses to invest, grow and create jobs.
The proposals come as data centres expand to meet demand linked to artificial intelligence. The facilities contain computer servers used to store and process data and run digital services. According to the data centre map cited by BBC News, there are currently 564 data centres listed in the UK, with 24 projects in the planning process in Scotland.
New data centres have faced opposition in some areas, with residents raising concerns about noise, electricity demand and the use of water to cool high-performance chips.
