UK proposes big deposits to clear data center power grid queue

In short: The UK energy regulator Ofgem has proposed new rules to push unplanned data center projects out of the power grid connection queue.

What happened

Ofgem says the UK’s waiting list to connect large projects to the power grid has become clogged, especially with proposed data centers. Data centers are large buildings full of computers that run online services and AI systems, and they use a lot of electricity.

In July, Ofgem published a proposal aimed at removing “phantom” projects, meaning applications that are unlikely to ever be built. Under the plan, developers would need to pay a steep, nonrefundable deposit, which could rise to hundreds of millions of dollars for the biggest sites. They would also need to show they have customers lined up and the money to actually complete construction.

Ofgem says the growing queue is making it harder to predict future electricity demand and plan upgrades. Between November 2024 and June 2025, the total requested power in the queue rose from 41 gigawatts to 125 gigawatts, according to Ofgem. Ofgem says new data centers account for 73 gigawatts of that total, a figure it compares to the UK’s overall peak demand.

Why it matters

This is a balancing act. If the deposit is too low, speculators can keep “reserving” grid access like people grabbing concert tickets to resell later (ticket scalping). If it is too high, some companies may decide it is cheaper to build data centers in other countries, which could slow the UK’s plans to expand the computing capacity needed for AI.

Source: Wired