Ofgem sets out plans to tackle speculative data centres

Ofgem has set out plans to tackle speculative data centre projects to ensure network capacity is used for projects that are ready and able to connect. 

A commitment fee and new project progress milestones could be introduced in response to a surge in demand connection applications, largely driven by data centre projects.

The regulator said the reforms will help protect consumers, improve confidence in network planning and clear the way for viable projects to connect faster

The new commitment fee, which would be paid by large data centre developments when accepting a connection offer, would be refunded when the project reaches energisation and forfeited if the project exits the queue early.

Ofgem’s Director for Energy System Design and Development Eleanor Warburton 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.”