Ofgem, the UK energy regulator, has proposed requiring developers of data centres to pay large refundable deposits before connecting to the electricity grid, in an effort to filter out speculative projects clogging the connections queue. This matters because demand for grid connections has surged as data centres, essential for powering the artificial intelligence boom, multiply across the country, straining an electricity network already under pressure and fuelling local opposition to new developments.

Under the proposals, now open for consultation until 16 September, developers would pay a deposit of between £237,500 and £712,500 per megawatt, meaning a project seeking one gigawatt of capacity could face an upfront bill of hundreds of millions of pounds, refundable once the scheme is completed. Ofgem said the electricity capacity requested by projects in the grid queue has jumped from 41GW to 125GW in the past year, more than double Britain's 2025 peak demand of around 46GW. There are currently 564 data centres in the UK, with Scotland — valued for its renewable energy supply — seeing 24 more in planning. Ofgem's Eleanor Warburton said consumers "should not bear the risks" created by speculative projects taking up scarce network capacity.