Ofgem Proposes Fees to Clear Speculative Data Centres From the Grid Connection Queue
On 29 July Ofgem opened a consultation on making data centre developers pay a returnable fee and prove progress to keep their place in Great Britain's demand connection queue. The proposals apply only to data centres, but Ofgem's data shows some data centre requests replaced earlier battery requests.
The problem Ofgem describes
Ofgem says contracted demand in the connection queue rose from 41 GW in November 2024 to 125 GW in June 2025. The consultation document puts about 73 GW of that in data centres across roughly 315 projects. Ofgem's press release gives a different share, at least 80 GW, and we could not reconcile the two figures. For scale, peak demand in Great Britain in 2025 was 45 GW.
Ofgem argues that low entry costs let speculative projects join and stay in the queue. That distorts network planning, locks up capacity and delays viable projects.
What is proposed
There are two measures. The first is a returnable commitment fee for projects above 40 MW, set at 2.5% to 7.5% of average capital cost, which Ofgem puts at roughly £237,500 to £712,500 per MW. It would be forfeited if the project ends or fails to meet requirements.
The second is a set of milestones. Developers would need to show evidence of a credible end user, ordering of long-lead electrical equipment, and financial and technical readiness, or risk losing their queue position. The consultation closes on 16 September, and Ofgem intends to take decisions later in 2026.
Where batteries come in
Ofgem notes that between May 2024 and August 2025, at least 9 GW of data centres in the transmission queue had switched from a battery connection request to a data centre request. The proposals do not apply to energy storage or other demand types. Ofgem says a second stage may consider similar measures for them later.
What it means for home battery owners
Home batteries connect through your local network operator, using the G98 or G99 process, and not through the large-demand queue this consultation covers. Ofgem's page does not mention household connections, so nothing changes for a home installation.
The relevance is indirect. Decisions about grid capacity affect how quickly large flexible assets and new demand connect, which feeds into the grid story we explored in home batteries and the grid: problem or solution? and virtual power plants turn home batteries into grid assets.
Sources
- Ofgem: Ofgem acts to free up grid capacity by tackling speculative data centre projects
- Ofgem: Proposed data centre connection reforms, Curate consultation document
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