Datacentre projects in Britain will be required to provide significant upfront fees or financial security to secure an energy connection, under new proposals from the energy regulator Ofgem. This measure aims to address a growing logjam in the electricity grid.
Ofgem states that 315 datacentres are currently awaiting connection, collectively representing 73GW of demand. This figure is almost 30GW higher than the entire country's peak energy demand of 45GW.
The proposals suggest that projects would need to lodge upfront fees or financial security, such as letters of credit, bonds, or cash deposits, when they receive a connection offer. These funds would be returned once the datacentre is operational. Ofgem is proposing pledges of £350m to reserve 500MW of grid capacity.
The regulator also indicated that projects would need to meet specific targets during the application process, including securing customers and financial backing, or risk being removed from the queue. Ofgem emphasised its goal to ensure limited grid capacity is allocated to projects most likely to be built.
These proposals will now undergo a consultation process to assess their feasibility.