The British energy regulator is considering a refundable deposit system for data centre developers to manage surging electricity grid demand.
Key facts
- •Ofgem has opened a public consultation on the proposed deposit measures that will run until 16 September.
- •The current request for grid capacity, at 125 GW, is more than double Britain's 2025 peak electricity demand of approximately 46 GW.
- •Data centres are large facilities housing servers used to store data and support internet services.
- •The proposed deposits are intended to manage the queue for grid connections amid rising demand for AI infrastructure.
The British energy regulator, Ofgem, has proposed new measures requiring data centre developers to pay refundable deposits to secure connections to the electricity grid. The move comes as the regulator faces a significant increase in requests for grid capacity, which has risen from 41 gigawatts to 125 gigawatts over the past year.
By the numbers
Proposed Deposit Structure
Under the proposal, developers would be required to pay between £237,500 and £712,500 per megawatt. For a data centre requiring 1 gigawatt of power, this would result in an upfront cost of hundreds of millions of pounds. These deposits would be returned to the developer upon the successful completion of the project. Additionally, developers would be required to meet specific milestones to maintain their position in the grid connection queue.
Rising Demand and Local Concerns
The surge in demand for grid connections is largely driven by the growth of artificial intelligence, which requires significant computing power. While data centres are essential for digital services, they have faced local opposition. Residents near proposed sites have cited concerns regarding noise, high electricity consumption, and the large volumes of water required for cooling high-performance chips.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by BBC Technology.
