Data centers may have to pay millions upfront for UK power connections
Britain's energy regulator Ofgem has launched a consultation on new measures aimed at removing speculative data center projects from the country's electricity connections queue, seeking to free up grid capacity for developments that are ready to proceed, Qazinform News Agency correspondent reports.
The proposals come after applications for electricity demand connections more than tripled, rising from 41 gigawatts (GW) in November 2024 to 125GW by June 2025. Data center projects account for most of the increase, representing around 73GW to 80GW of requested capacity.
Under the proposed reforms, large data center developers would be required to pay a commitment fee when accepting a grid connection offer. The fee would range from about $316,000 to $948,000 per megawatt, or about 2.5% to 7.5% of average project costs. It would be refunded once a project is energized but forfeited if the developer withdraws before connecting.
Ofgem is also proposing new project milestones that would require developers to demonstrate tangible progress, including financial capability, commercial readiness, and procurement activity, in order to keep their place in the connections queue.
The regulator said the measures are designed to prevent speculative projects from occupying scarce grid capacity without a genuine intention to connect, allowing viable developments to secure connections more quickly while improving confidence in future network planning.
According to Ofgem, earlier electricity connection reforms have already accelerated about 7.8GW of projects by an average of six years. The regulator expects the new demand connection measures to deliver similar benefits by speeding up access to the grid for investment-ready projects.
The public consultation will remain open until September 16, 2026.
Earlier, Qazinform News Agency reported that President Tokayev presented a Data Center Valley project in Shanghai.
