UK regulator Ofgem proposes deposits for data centre grid connections

Ofgem, the UK electricity regulator, has announced a proposal that would require data‑centre developers to pay refundable deposits when applying for a connection to the national grid. The fee would range from £237,500 to £712,500 per megawatt of capacity, meaning a 1‑GW project could face costs of hundreds of millions of pounds. Deposits would be returned once the facility is drawing power and would be forfeited if the project leaves the queue early.

The measure responds to a surge in grid‑connection requests, which have risen from 41 GW to 125 GW in a year, with data centres accounting for about 80 GW of the new demand. Ofgem says the deposits will deter speculative applications that block capacity and delay genuine projects. The consultation runs until 16 September, and Energy Minister Michael Shanks has voiced support, describing the scheme as needed to modernise Britain’s connection system for 21st‑century demands. Scotland is highlighted as an attractive location for new facilities because of its renewable‑energy resources.