UK government reforms could see datacentres jump grid connection queue

The UK government has announced that it plans to consult about implementing reforms to the electricity grid connection process that will prioritise “strategically important projects including AI datacentres”.

The move aims to tackle speculative grid connection applications, which have seen the queue for connections to the transmission network grow by 460% in just six months.

Justification for the launch of the consultation that will lead to reforms is that speculative applications have inflated the grid connection pipeline and delayed connections for strategically important projects.

According to the government announcement, the consultation and reforms aim to tackle speculative applications, address the oversubscribed queue and accelerate viable projects that will benefit Britain. “This includes datacentres and AI growth zones, EV [electric vehicle] charging hubs and electrified industrial sites to revitalise Britain’s industrial heartlands,” it said.

The reforms aim to create a fairer, more efficient system by strengthening the conditions to join and remain in the grid connection queue.

Ofgem also plans to consult on its preferred conditions, which could include increasing financial requirements for developers in the queue, such as deposits or fees that would be payable if key milestones are not met.

It is intended that the reforms will allow the government to publish a list of strategically important projects, including AI growth zones, which will go to the front of the queue as capacity is freed up or created.

Energy minister Michael Shanks said: “Industries that can bring real economic benefits are ready and waiting to be powered up, but the queue for grid connections has grown exponentially due to speculative applications.” 

The backdrop of all this is increased demand for electricity grid connections, many of which are from datacentre projects.

A recent Ofgem call for input to grid connection reform found that total contracted offers in the demand queue rose sharply from 41GW in November 2024 to 125GW in June 2025. For comparison, peak electricity demand on 11 February 2026 was 45GW.

The same document also pointed to Neso’s Demand Queue Call for Input, which suggests a “significant portion of projects in the demand queue are datacentres”. There were 140 of these, it said, totalling 50GW in capacity requested. Of these, it said 71 – or around 20GW in capacity terms – had achieved financial commitment.

The Ofgem document also said: “We expect a significant number of projects in the demand queue to be non-viable . . . those that are unlikely to progress to connection, for example, those unable to obtain planning permission or secure [funding].

It added: “These non-viable projects are potentially blocking important demand projects, such as those datacentres required for the government’s AI growth zones programme.”

Eleanor Warburton, Ofgem director for energy system design and development, said “bold action” was required to deal with the growing bottleneck in demand projects connecting to the grid.

“Ofgem is consulting on tough reforms to block or remove unviable, stalled or speculative projects from the queue – and these are important further steps from government in prioritising and fast-tracking those projects which will drive growth, jobs and innovation,” she said.