Ofgem has launched a consultation on new measures to remove speculative, stalled and unviable data centre projects from Britain's electricity connections queue, as applications for grid capacity have increased three-fold in less than a year, up from from 41GW to 125GW.

Data centre developments account for at least 73GW of the pipeline across 315 projects, according to Ofgem, on the back of rapidly rising demand driven by artificial intelligence (AI) and hyperscale computing. These are seeing companies across different sectors attempting to reposition land and assets towards potentially highly lucrative but power-hungry data centre facilities.

The energy regulator is proposing a new 'data centre commitment fee' of between £237,500 and £712,500 per MW, equivalent to around 2.5%-7.5% of average project costs, which developers would pay when accepting a grid connection offer. The fee would be refunded when a project is energised but forfeited if it exits the queue early.

Ofgem is also proposing new project milestones requiring developers to demonstrate financial capability, commercial progress and procurement activity to retain their place in the queue.

Eleanor Warburton, director for energy system design and development at Ofgem, said: "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.

"We're consulting on a new data centre commitment fee and stronger requirements to ensure projects demonstrate real commitment before securing scarce network capacity," saying the proposals would free up capacity for viable developments, improve confidence in network planning and support faster grid connections.

The watchdog said the reforms are designed to prevent developers from reserving scarce grid capacity without genuine plans to build, helping viable projects connect more quickly while improving network planning and protecting consumers. It comes as wider grid connection reforms have already accelerated around 7.8GW of projects by an average of six years.

Energy minister Michael Shanks added: "Britain needs a grid connections system that works for the 21st century and allows businesses to invest and grow, creating jobs across the country."

The consultation runs until 16 September.

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