Technology
UK energy regulator proposes deposit requirements to clear speculative data center grid queue
Ofgem's proposal aims to deter phantom projects that bloat the power queue, though industry experts warn high costs could deter legitimate developments.
The short version
- UK regulator Ofgem proposed rules requiring data center developers to put down steep nonrefundable deposits, secure customers in advance, and prove funding to obtain power grid access.
- The queue's total projected energy demand expanded from 41 gigawatts to 125 gigawatts between November 2024 and June 2025, driven largely by 73 gigawatts of new data center requests.
- Industry experts caution that while the measures will curb speculative queue-jumping, excessive fees risk driving legitimate investment away from the UK and hurting smaller operators.
Key facts
- The energy demand from projects in the UK grid connection queue rose from 41 gigawatts to 125 gigawatts between November 2024 and June 2025.[Wired]
- Data centers make up 73 gigawatts of the power demand currently listed in the UK's connection queue.[Wired]
- Under Ofgem's proposed rules, developers would face nonrefundable deposits that could reach hundreds of millions of dollars for the largest facilities.[Wired]
- The UK government designated data centers as critical national infrastructure toward the end of 2024.[Wired]
- Industry consultation on Ofgem's proposal is scheduled to run through September before the regulations are finalized.[Wired]
What remains uncertain
- The final deposit amount and exact criteria Ofgem will adopt remain unsettled pending the end of the industry consultation period in September.[Wired]
- The degree to which higher deposit fees might deter legitimate developers or smaller operators from building in the UK instead of international markets is uncertain.[Wired]
Sources
- The UK Power Grid Has a Phantom Data Center ProblemWired metered