Ofgem has announced plans to address congestion on Britain's electricity grid by targeting speculative AI data centre projects. The energy regulator is consulting on proposals that include a new upfront commitment fee for large data centre developers and stricter rules requiring projects to demonstrate financial and commercial readiness before securing grid capacity.
The move follows a significant increase in demand for electricity connections, which more than tripled from 41GW to 125GW between November 2024 and June 2025. Data centres represent at least 73GW of this pipeline across 315 projects, raising concerns that speculative schemes are hindering viable developments.
Under the proposed changes, developers would pay a refundable fee of between £237,500 and £712,500 per MW when accepting a connection offer. This money would be returned upon a project's energisation but forfeited if developers withdraw from the queue. Ofgem stated these reforms aim to ensure grid capacity is allocated to projects ready to build and to improve confidence in future network planning.
Eleanor Warburton, Ofgem director for energy system design and development, said consumers "should not bear the risks created by speculative projects taking up space in the system."