Ofgem has proposed new charges and tougher rules to clear speculative data centre projects out of Britain’s electricity connections queue, in a bid to free up scarce grid capacity for schemes that are actually ready to build.
The regulator opened a consultation on Wednesday on plans to weed out stalled and unviable projects, after a sharp jump in demand for grid connections.
Contracted demand offers rose from 41GW to 125GW between November 2024 and June 2025, a surge driven largely by data centres, which account for at least 73GW of the pipeline.
At the centre of the proposals is a new Data Centre Commitment Fee, payable when a large data centre development accepts a connection offer. The fee would be refunded once the project is energised, but forfeited if it drops out of the queue early.
Alongside the fee, developers would have to meet new milestones to keep their place in the queue, showing tangible progress through evidence such as financial capability, commercial maturity and procurement activity.
Ofgem said it is concerned that a significant number of projects in the queue may never proceed, holding up viable developments and creating misleading signals about how much network investment is actually needed.
It pointed to earlier connections reforms that have accelerated around 7.8GW of projects by an average of six years, and said it expects the latest measures to have a similar effect on demand connections while protecting consumers and improving confidence in network planning.
Energy Minister Michael Shanks said: “Britain needs a grid connections system that works for the 21st century and allows businesses to invest and grow, creating jobs across the country. That’s why this government reformed the connections process and why Ofgem’s actions will help ensure that viable, connection-ready projects can get going and not be held up by speculative applications”
“The consultation forms a key part of Ofgem, DESNZ and NESO’s wider Demand Connections Reform programme, which is built around three pillars: Curate, to ensure only viable projects enter and remain in the queue; Plan, to support government-led prioritisation of strategically important projects; and Connect to accelerate physical grid connections.