Data centres could pay hundreds of millions in deposits for power demands
The UK energy regulator Ofgem is proposing that data centre developers pay significant upfront deposits to secure grid connections. This measure aims to manage the surge in electricity demand driven by the rapid expansion of AI infrastructure.
Why it matters
It highlights the growing tension between the massive energy requirements of AI development and the capacity limits of national power grids.
Image source, Bloomberg via Getty Images Image caption, There are currently 564 data centres in the UK
Ofgem has proposed new measures which could see developers of data centres made to pay hundreds of millions of pounds up front.
The British energy regulator said a refundable fee should be charged for projects that want to connect to the network, amid mounting demand for connections to the electricity grid.
It is proposing developers pay a deposit between £237,500 to £712,500 per megawatt - meaning data centres seeking 1 gigawatt (GW) of power would have to pay hundreds of millions up front, paid back if the project was completed.
The proposal follows growing opposition in parts of the country to plans for new data centres, which are needed to power the artificial intelligence boom.
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