Data center developers in the UK are grappling with a grid logjam as the number of projects waiting for power connections has surged, raising concerns about energy demand forecasts and grid expansion planning. The situation has worsened as developers compete for a share of the hundreds of billions of dollars flowing into the artificial intelligence industry. The UK’s energy regulator, Ofgem, has proposed new rules to address the issue, requiring developers to submit nonrefundable deposits and secure customer commitments before joining the grid queue.
The reforms aim to deter speculative projects while preserving the UK’s ambitions to meet the growing demand for AI compute. However, the challenge lies in balancing the need to discourage phantom data centers with the risk of driving legitimate projects to other markets. Ofgem’s proposal, set to finalize in September, faces criticism for potentially making the UK one of the most expensive places to build a data center, given the high cost of energy and limited land availability. Industry experts warn that the reforms could have unintended consequences, including deterring smaller, AI-specific data center operators.
The queue to join the UK grid began to balloon toward the end of 2024, when the government designated data centers as critical national infrastructure. Between November 2024 and June 2025, the total energy demand of the projects in the connection queue increased from 41 gigawatts to 125 gigawatts, according to Ofgem. New data centers make up 73 gigawatts of that—equivalent to one and a half times the peak demand for the entire UK last year—and counting.
Source: wired
