Ofgem
The Office of Gas and Electricity Markets, the Independent UK energy regulator overseeing the electricity and gas networks.
Ofgem proposed on 29 July 2026 that developers pay £237,500 to £712,500 per megawatt to hold a grid connection offer, refundable on energisation, to clear speculative data-centre demand out of Britain's connection queue.
Last refreshed: 7 October 2026 · Appears in 2 active topics
Can Ofgem's Curate reform clear the queue fast enough to keep AI investment in the UK?
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Data Centres: Boom and BacklashBackground
Ofgem, the Office of Gas and Electricity Markets, is Britain's Independent statutory regulator for the gas and electricity networks. It was set up in 2000 and is based in London. It sets the rules for network operators and the framework for consumer tariffs, and it decides how connection to the grid is allocated and charged.
Its REMIT covers households as well as infrastructure. Its debt and arrears indicators put household energy debt and arrears at £5.02bn at the end of June 2026, up 13% on a year earlier, with about 1.19 million electricity accounts and 0.95 million gas accounts in arrears with no repayment plan. Ofgem counts supplier-reported debt only, so its total sits below the higher figures trade bodies cite. In 2023-24 it ran a debt relief scheme, funded through the price CAP, that wrote off part of the arrears of customers in hardship.
Ofgem sits between two pressures it cannot resolve alone: ministers WHO want faster connections to keep data-centre investment in Britain, and consumer advocates WHO see any cost of acceleration landing on household bills. Ofgem settles that trade-off through its rulings on connection charges, deposits and tariffs.
It puts a price on queue places
Ofgem opened a consultation on 29 July 2026 proposing a Data Centre Commitment Fee of £237,500 to £712,500 per megawatt, payable when a developer accepts a grid connection offer and refunded once the site is energised. The consultation closed on 16 September. Demand applications had risen from 41 GW to 125 GW between November 2024 and June 2025, roughly 80 GW of it data centres.
Ofgem designed the fee to filter applicants, not to raise revenue. Ofgem's judgement is that much of the queue will never be built and is blocking projects that would be, so it prices the reservation rather than rationing it by rule. Ireland's regulator took the opposite route, requiring renewable matching and on-site generation; Ofgem's design screens developers on capital rather than on physical capability.
Queued demand outgrows the national peak
Britain's grid-connection register held 50 GW of data-centre demand from around 140 facilities by February 2026, against a national peak of 45 GW on 11 February. Ofgem's response that month was three Reform workstreams, Curate, Plan and Connect, meant to strip speculative applications out and re-rank the queue by readiness. None of them shortens the years it takes to build new transmission lines.
The cost of that gap showed in April. OpenAI paused its planned data centre at Cobalt Park, North Tyneside, on 23 April, citing an unfavourable regulatory environment and high energy costs. It later put UK industrial electricity at more than four times US and Nordic rates, a figure that lands directly on Ofgem's 2026 transmission tariff review.