The UK Power Grid Has a Phantom Data Center Problem
wired ·
The UK’s electricity-grid queue is clogged with speculative data center projects that may never be built, worsening delays for viable developments and complicating energy-demand forecasts and grid planning. Ofgem proposed in July that developers pay steep, nonrefundable deposits—potentially hundreds of millions of dollars for the largest facilities—and demonstrate that they have customers and sufficient funding. The queue’s projected demand rose from 41 gigawatts in November 2024 to 125 gigawatts by June 2025, including 73 gigawatts from new data centers, equivalent to one and a half times the UK’s peak electricity demand last year. Low application costs and long waits for connections encourage developers to reserve capacity without firm plans, while some intermediaries seek to profit by selling land bundled with grid access. The reforms are expected to remove many speculative projects and help operators target grid investments more accurately. However, industry observers warn that excessive fees could drive legitimate projects abroad, increase the UK’s already high data center costs, and disadvantage smaller AI-focused companies. Ofgem must therefore balance clearing the queue with preserving investment needed for the UK’s AI and economic ambitions.
wired