The UK’s energy regulator Ofgem has launched a new consultation to deal with the influx of speculative data center applications within the UK’s interconnection queue.

The plan comes as demand connection applications have increased from 41GW to 125GW in less than a year, driven primarily by the data center market, which accounts for approximately 80GW of the new demand.

The proposed reforms include a new Data Centre Commitment Fee, which large load data centers would pay when accepting a connection offer.

The fee would subsequently be refunded when the project is energized and forfeited if the project exits the queue early. According to Ofgem, the fee would be between £237,500 ($315,875) and £712,500  ($947,625) per megawatt, which it claims is equivalent to approximately 2.5 percent to 7.5 percent of average project costs.

Ofgem claims that the new fee will help it tackle speculative projects with no firm intention to connect. This, in turn, the regulator argues, will protect consumers, improve confidence in network planning, and clear the way for viable projects to connect more quickly.

Alongside the fee, Ofgem has also announced that it will begin consultations on new data center-specific queue management milestones that would require developers to demonstrate tangible progress through evidence such as financial capability, commercial maturity , and procurement activity to maintain their position within the queue.

Commenting on the plans, Ofgem’s director for Energy System Design and Development Eleanor Warburton said: “We’re consulting on a new data center commitment fee and stronger requirements to ensure projects demonstrate real commitment before securing scarce network capacity. These reforms will help free up capacity for viable projects, improve confidence in network planning and support faster connections where they are needed most.

“By helping projects that are ready to move forward and connect more quickly, these reforms can also support economic growth, bringing forward investment, enabling businesses to be built and expanded sooner, and ensuring the benefits of that investment are felt across the economy more quickly.” 

The consultation is open until September 16, 2026. It forms a crucial part of Ofgem, DESNZ and NESO’s wider Demand Connections Reform program. The program is built around three key pillars: ensuring only viable projects enter and remain in the queue, supporting government-led prioritization of strategically important projects, and accelerating physical grid connections.

The consultation announcement follows reports last month that Ofgem is considering whether data centers should be required to cut power consumption during periods of system stress. The new rules would require mandatory curtailment as a backstop measure, with Ofgem arguing that greater control over large power users could give the electricity system more flexibility to connect additional demand while maintaining reliability.

Ofgem is the independent government regulator for the electricity and downstream natural gas markets in the UK.