UK introduces deposit system to regulate speculative data center applications

Ofgem, Britain's energy market regulator, announced the implementation of a connection security deposit mechanism designed to curb speculative applications for data center grid access. The system charges between 237,000 and 712,000 pounds per megawatt of capacity, with deposits returned when the data center reaches operational status. The regulation responds to exponential growth in connection requests: from 41 gigawatts in November 2024 to 125 gigawatts in June 2025, with data centers accounting for over 80% of this surge. The measure targets elimination of projects lacking genuine financial and commercial viability. Ofgem is simultaneously consulting on data-center-specific queue management milestones requiring developers to demonstrate material progress through financial metrics, commercial maturity, and procurement evidence before maintaining their queue position.