Ofgem is proposing tougher rules to remove speculative “phantom” data centre projects from the UK electricity grid connection queue. The measures aim to speed up access for credible developments, which is important for the UK’s AI ambitions and wider economic growth, but could also make the country less attractive for investment.

Developers may have to pay large non-refundable deposits, secure customers and prove funding before receiving grid capacity; for the biggest sites, deposits could reach hundreds of millions of dollars. Projects seeking connections rose from 41GW in November 2024 to 125GW by June 2025, including 73GW from data centres—around one and a half times the UK’s peak electricity demand last year. Cheap queue entry has encouraged developers to reserve capacity without firm plans, worsening delays and enabling some to profit by reselling land with grid access.