UK grid jammed by phantom data centers; Ofgem plans deposits up to hundreds of millions
nordicinst · x · 2026-08-27
The UK's grid connection queue is clogged with speculative data center projects that will likely never be built, worsening years-long waits for viable projects and distorting energy demand forecasts and grid planning.
Regulator Ofgem proposed reforms in July (finalized after September feedback): developers must post steep nonrefundable deposits—potentially hundreds of millions of dollars for the largest sites—and prove they have lined up customers and funding.
But Ofgem faces a Goldilocks conundrum: rules too strict could push legitimate projects abroad, making the UK—already unattractive due to high energy costs and land scarcity—one of the world's priciest places to build, undermining its AI compute ambitions. Similar grid congestion afflicts the US and much of Europe.
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