Data centre developments could be saddled with new fees for grid access under new proposals from energy regulator Ofgem as it seeks to ease connection queues.
It has launched a consultation on plans to tackle speculative data centre projects as part of a wider programme of reforms to ensure network capacity is used for projects that are ready and able to connect.
The proposals – which include the introduction of a commitment fee and new project progress milestones – come as demand connection applications have surged from 41 gigawatts (GW) to 125GW in under a year. This rise is driven largely by data centre projects, accounting for at least 80GW.
Ofgem 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.
“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,” said Ofgem director for energy system design and development Eleanor Warburton.
“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.”
The proposals follow a sharp increase in demand connection applications, with contracted demand offers increasing from 41GW to 125GW between November 2024 and June 2025, driven largely by demand from data centre projects. Ofgem is concerned that a significant number of projects in the queue may not ultimately proceed, potentially delaying viable developments.
Alongside the proposed fee, Ofgem is 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.
The consultation is open until 16 September 2026.
Please visit:
Our Sponsor