As knowledge heart builders compete for a lower of the tons of of billions of {dollars} flowing into the artificial intelligence trade, the queue to hitch the UK’s energy grid has turn into jammed with initiatives that may doubtless by no means get constructed. The snarl is exacerbating already years-long wait instances for viable initiatives, and it is messing with makes an attempt to forecast vitality demand and plan grid expansions.
In July, the UK’s vitality regulator, Ofgem, laid out a proposal meant to pressure phantom data centers out of the swollen queue. Underneath the plans, set to be finalized after an trade suggestions course of that ends in September, builders could be required to place down a steep, nonrefundable deposit that might balloon to tons of of hundreds of thousands of {dollars} for the very largest knowledge facilities. Builders would even be required to line up prospects prematurely and show they’ve the funding to finish their builds.
Nonetheless, Ofgem faces a Goldilocks conundrum: The reforms should be burdensome sufficient to discourage speculators however not a lot that they drive official knowledge heart initiatives to different shores, undermining the UK’s ambitions to fulfill the voracious demand for the compute required to run refined AI fashions.
Information heart builders face delays nearly in all places; comparable grid congestion points afflict the US and international locations across Europe. However whereas the US is a highly desirable market, Ofgem’s reforms danger making the UK—already unattractive for the excessive price of vitality and dearth of land—one of many world’s most costly locations to construct a knowledge heart, trade consultants imagine.
The frenzied knowledge heart buildout “is bringing an enormous quantity of capital funding into the UK,” says Alex Burgoyne, head of knowledge facilities at actual property consultancy Knight Frank. “We don’t need to shoot the golden goose.”
Ofgem says that it’ll have in mind trade considerations earlier than deciding on a payment, however that variations between worldwide vitality markets make like-for-like comparability tough. “We acknowledge knowledge facilities are a key a part of the UK’s AI ambitions and future financial progress. Enabling viable knowledge facilities to attach extra rapidly is an enabler of this,” Nathan Macwhinnie, deputy director of strategic planning and connections at Ofgem, tells WIRED in an announcement.
The queue to hitch the UK grid began to balloon towards the tip of 2024, across the time the federal government designated knowledge facilities “important nationwide infrastructure.” Between November 2024 and June 2025, the overall vitality demand of the initiatives within the connection queue elevated from 41 gigawatts to 125 gigawatts, according to Ofgem. New knowledge facilities make up 73 gigawatts of that—equal to 1 and a half instances the peak demand for your complete UK final yr—and counting.
The federal government has said it believes a lot of that demand is a mirage. “It’s completely insane,” says Taco Engelaar, managing director at grid optimization firm Neara. “Nobody actually understands … what the true grid demand will likely be due to these phantom initiatives.”
The crowded queue is basically the product of an incentives downside. As a result of builders face a years-long look ahead to grid entry, and it has beforehand price only some thousand {dollars} to hitch the queue, they may as properly apply for energy, even when they don’t have a watertight plan to develop a website. It’s a no-downside guess that enables builders to hedge for a future by which demand for compute stays sky-high.
Nonetheless, as a result of grid operators should account for the mixed impact of enormous infrastructure proposals on community stability earlier than granting particular person connections, phantom knowledge facilities can exacerbate already-lengthy delays for viable initiatives. “They should deal with each undertaking as critical after they attempt to research whether or not the system can deal with them,” says Olivier Darmouni, affiliate professor of finance at HEC Paris Enterprise College, who has printed research on the impression of AI on energy grids. “The extra speculative initiatives are particularly damaging as a result of they make these research extra advanced, costlier, longer.”
