The UK’s energy regulator, Ofgem, is floating the idea of requiring data centres to post refundable deposits, potentially worth hundreds of millions of dollars, before they can reserve spots in the country’s electricity grid queue. The goal is straightforward: stop speculative projects from clogging up the system while genuine developments wait in line.

Around 140 data centre projects are currently seeking roughly 50 GW of connection capacity to the British grid. Great Britain’s peak electricity demand sits at approximately 45 GW. In other words, data centres alone are asking for more power than the entire country uses at its busiest moments.

A queue that’s spiraling out of control

Ofgem launched what it calls a “Call for Input on Demand Connections Reform” on February 13, 2026, with responses due by March 13. The total demand sitting in the connections queue grew from 41 GW in November 2024 to 125 GW by June 2025. That’s a tripling in roughly seven months. Meanwhile, the UK’s actual operational data centre capacity is about 2 GW.

Only about 71 of those 140 data centre projects, representing around 20 GW, had even reached a Final Investment Decision by late 2025 or early 2026. The rest are somewhere between aspirational and speculative.

The proposed financial mechanisms include refundable deposits tied to specific application milestones and progressive commitment fees. The deposits would be returned once projects hit their development benchmarks, but they’d serve as a filter against applicants who aren’t serious about building. Ofgem hasn’t specified exact dollar figures for the deposits yet.

Why this matters beyond the UK energy market

The UK government designated AI Growth Zones and began qualifying data centres for Nationally Significant Infrastructure Project status starting January 8, 2026, essentially fast-tracking planning approvals. At the same time, Ofgem is now proposing financial hurdles that could slow down or eliminate projects that lack deep pockets.

Ofgem plans to reveal its initial proposals, or “minded-to” positions, in spring 2026. That timeline means the actual rules could take shape by late 2026 or early 2027, depending on consultation feedback and political priorities.

Investors should watch the spring 2026 proposals closely for two things: the actual deposit amounts and the milestone definitions that trigger refunds. Those details will determine whether Ofgem’s reforms are a reasonable quality filter or a barrier that reshapes which players can afford to build in the UK at all.