Ofgem has launched a consultation on its plans to tackle speculative data centre projects in the UK.
The regulator said demand connection applications surged from 41 GW to 125 GW between November 2024 and June 2025 driven largely by demand from large data centre projects, which accounted for at least 80 GW of demand.
The regulator is proposing a new ‘data centre commitment fee’, which would be paid by large data centre developments when accepting a connection offer. The fee would be refunded when the project reaches energisation and forfeited if the project exits the queue early.
The fee would be set within a proposed range of £237,500 to £712,500 per megawatt, equivalent to around 2.5% to 7.5% of average project costs.
Ofgem is also consulting on new data centre specific queue management milestones that would require developers to demonstrate tangible progress through evidence such as financial capability, commercial maturity and procurement activity if they wish to retain their place in the queue.
Eleanor Warburton, director for energy system design and development at Ofgem, said: “Britain’s electricity demand connections queue has more than tripled in size in less than a year, and consumers should not bear the risks created by speculative projects taking up space in the system. The connections system must work for consumers and for the projects that are ready to invest, build and connect. Where speculative projects take up space in the queue, they can delay other schemes and create uncertainty about future network needs.
“We’re consulting on a new data centre commitment fee and stronger requirements to ensure projects demonstrate real commitment before securing scarce network capacity. These reforms will help free up capacity for viable projects, improve confidence in network planning and support faster connections where they are needed most. By helping projects that are ready to move forward and connect more quickly, these reforms can also support economic growth, bringing forward investment, enabling businesses to be built and expanded sooner, and ensuring the benefits of that investment are felt across the economy more quickly.”
