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Ofgem Proposes Strict Commitment Fees to Clear Speculative Data Centres from UK Grid Queue

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Ofgem on Wednesday introduced major regulatory reforms targeting a surge in speculative data center grid connection applications that have tripled demand to 125 gigawatts to free up scarce network capacity.

Driven largely by data center applications, the national demand connection queue surged from 41 GW to 125 GW in under a year, with data centers accounting for at least 80 GW.

To protect consumers and clear grid capacity for viable projects, the regulator is proposing a Data Center Commitment Fee ranging from 237,500 British pounds ($315,875) to 712,500 pounds per megawatt, representing 2.5% to 7.5% of average project costs, which will be refunded upon energization or forfeited if a project exits early.

Alongside the financial deterrent, the consultation introduces stringent queue management milestones requiring developers to demonstrate tangible commercial maturity, financial capability, and procurement activity, it said.

The consultation remains open for public and market feedback until Sept. 16.

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