The UK’s energy regulator Ofgem has launched a wide-ranging review of electricity demand connection rules, with data center growth a primary driver.

In its Call for Input on Demand Connections Reform, the regulator outlined several measures to address the skyrocketing interconnection queue, which, according to Ofgem, grew from 41GW in November 2024 to 125GW in June 2025.

Of the current queue, approximately 50GW is tied to data center projects. The growth of this pipeline, with large amounts of the capacity tied to speculative and early-stage data centre applications, has become a focal point for policymakers.

The proposed reforms would take place in phases. Phase one is directed explicitly at the data center market, with Ofgem considering stricter financial and readiness tests designed to filter out speculative projects.

Options proposed include refundable deposits linked to delivery milestones, progressive commitment fees over the development lifecycle, upfront non-refundable deposits, evidence of secured financing, and outline or full planning permission as entry gates or milestone conditions.

Ofgem said it expects to publish its official position on Phase one in spring 2026.

Phase two of the proposed reforms is more all-encompassing, with the strengthened criteria extended to all demand sectors. For the data center market, this is likely to lead to a prioritization of projects located in the government-backed AI Growth Zones, or tied to one of the UK’s strategic energy plans.

Beyond the proposed reforms to the UK’s grid interconnection queue, the regulator also said that it was consulting potential ways to accelerate the delivery of new capacity.

These include expanded self-build of high-voltage assets, supported by clarification of the Electricity Act 1989, and potential introduction of an Independent Transmission Owner licence to enable more flexible and hybrid configurations.

The regulator also proposed greater use of ramped and flexible connection agreements, with data center operators who deploy modular capacity able to energize their facilities in phases.

Consultation responses are due by 13 March 2026, with new advisory groups to be established to shape the regulator’s final position.

Last year, the energy regulator approved a series of interconnection reforms proposed by the National Energy System Operator to clear the connection queue of “zombie” projects and prioritize projects aligned with the country’s strategic energy plans.

The reforms are expected to support the UK government’s Clean Power Action Plan, which could see around £40 billion ($51.3bn) of investment into the clean energy sector between 2025 and 2030.