Does data centre energy strategy need to be the first decision, before location?

Nscale’s planned AI data centre in Loughton could face a decade-long delay because the local grid can’t supply sufficient power, as reported by the Guardian. This flagship project, announced by government and backed by significant capital, may now have been stalled by something as fundamental as electricity supply.

It’s an extremely high-profile example of a growing problem.

Why is the grid so congested?

The UK’s grid connection queue has increased substantially in recent years, and data centres are competing for capacity alongside the electrification of transport, heating and industrial processes. Ofgem recently announced a consultation on proposed changes to the connection process, in an effort to counter the issue. Among the proposals is a data centre commitment fee of up to £712,500 per MW for projects of 40MW or more, payable when a developer accepts a connection offer.

But regardless, the simple fact is that grid infrastructure – to support the energy transition, as well as growing national requirements and the boom in data centre development – isn’t scaling at the same pace. Connection timelines that might once have been measured in months are now stretching into years, and in some cases, much longer.

Research by Buro Happold for the Greater London Authority found that data centre projects in London now face average connection waits of seven to 13 years.

Where should energy strategy sit in the development process?

For data centre operators planning new builds or expansions, there’s a very clear takeaway; energy capacity needs to be part of the site selection process from the very beginning. It’s no longer a safe assumption that grid power will be available when and where it is needed.

That means doing the due diligence early. This involves understanding what grid capacity exists in a given location, what the realistic connection timeline looks like, and what constraints the local distribution network operator is working within. These are the kinds of questions that need to sit alongside connectivity, planning, and commercial terms in any development business case.

It also means thinking seriously about what can be done on your own side of the meter. On-site generation, battery storage, and demand flexibility won’t solve every constraint, but they have serious potential to meaningfully reduce dependence on grid capacity. In some cases, a credible behind-the-meter strategy may even change whether a site is viable at all.

There’s a practical point here about how you engage with the network operator, too. It’s a very different conversation to come forward with a phased demand profile and a plan to ramp load over time, than it is to request full capacity from day one of site operations. That approach doesn’t guarantee a faster connection, but it could open up other options that a blanket request won’t.

What does the future hold?

None of this is about criticising any individual project or operator. The grid constraints the UK faces are structural, and unfortunately, they won’t be resolved quickly. Ofgem’s reform of the connections process is a step in the right direction, but the gap between policy intent and physical capacity remains significant.

The government’s recent announcement of Great British Grid, a new publicly owned company within Great British Energy, is another acknowledgement of the scale of the challenge. The proposal also includes reforms that would allow businesses and developers to build their own grid connections rather than relying on private network companies. For data centre operators with the right energy strategy already in place, that could represent a practical route around the existing queue.

What operators can control is how they plan around these constraints. It’s critical that energy strategy is baked into the foundations of a project, including a thorough understanding of the system it’s connecting into. Energy is not just a utility – a commodity purchase that can be guaranteed anywhere and anytime. It is a precious resource, which can reshape a project’s entire timeline.

Energy strategy belongs at the very start of the process, not the end.

By Maureen Bray, Managing Director – Equity Energies and Centreco

Projected savings, payback periods and operational benefits will vary depending on site demand profile, tariff structure, system design and future market conditions.