Powering the digital economy – Breaking the bottleneck: Can the UK’s grid keep pace with data centre demand?

Behind the UK’s burgeoning digital economy lies a hidden infrastructure: the energy that keeps it running. Every innovation in AI, cloud computing, and data analytics depends on electricity that is reliable, affordable, and increasingly, renewable. But as the demand for data grows, so does the complexity of delivering that power.

This four-part series from Equity Energies explores how data centres sit at the front line of this transformation, facing the realities of grid capacity, rising non-wholesale costs, evolving regulation, and the race to decarbonise, and how the sector’s response could define the future relationship between business, technology, and the energy system itself.

Data centres don’t just rely on power; they rely on connection. Yet connecting to the UK’s electricity grid has become one of the most serious obstacles to building and operating them.

Across the UK developers are ready to meet the soaring demand from cloud, AI, and digital industries. But many projects can’t begin construction because they’re stuck waiting for access to the one thing they can’t operate without: electricity.

The problem isn’t ambition or even investment. It’s infrastructure, or a lack of it. The pace of digital expansion is now outstripping the ability of the UK’s energy system to deliver the connections that make it possible.

Growing digital demand, limited physical supply

The UK’s data centre footprint continues to grow, particularly around London and the Southeast, where proximity to enterprise users and hyperscale clients drives development clustering. But these same regions are also where grid capacity is tightest.

For developers, securing a grid connection has become one of the most significant hurdles to successful project delivery. Reports suggest that the connection queue has now reached more than 400 GW, a pipeline so long that Ofgem estimates 60–70% of projects will never be built. Each new connection request adds to the backlog, increasing wait times and creating a vicious cycle of delay.

The implications stretch beyond individual data centre builds. The same queue also holds up the renewable generation projects line wind farms, solar installations, and battery systems, that are intended to provide low-carbon electricity to those data centres. Without these new assets connected and operational, both digital and decarbonisation progress will become constrained.

Why the queue keeps growing

The problem originates from the way the grid connection system has evolved. For years, projects were handled on a “first come, first served” basis, regardless of how ready they were to proceed. Developers could apply for capacity early in the planning cycle and reserve a place in the queue long before securing land, funding, or permissions.

Over time, speculative projects filled up the system, taking connection slots that more advanced developments could have used. With limited transmission capacity and long lead times for network upgrades, genuine projects found themselves waiting years, sometimes up to a decade, for a connection date.

At the same time, the grid itself faces its own constraints. As the UK electrifies transport and heating alongside industrial decarbonisation, demand for grid access is increasing faster than the infrastructure can expand. Upgrading cables, transformers, and substations takes years and significant capital investment, creating yet another layer of bottleneck.

A new model for connection

In response, Ofgem and the National Energy System Operator (NESO) are introducing a major regulatory reform: the “first ready, first connected” model. Under this system, projects will be prioritised based on their readiness and strategic value rather than just the timing of application. To move through the two-stage process, developers must demonstrate that their projects meet key criteria:

• Gate 1: For early-stage projects, providing an indicative connection date but requiring evidence of progress before moving forward.
• Gate 2: The critical stage for queue admission, where developers must prove both “readiness” (land, planning permission, and funding secured) and “strategic alignment” with Net Zero and network priorities.

This shift is designed to clear the connection backlog by filtering out speculative projects and rewarding credible, well-prepared developments. NESO expects it could cut connection times from up to 10 years to as little as two to four years for strategic builds, and even faster (1–2 years) within designated AI Growth Zones.

But within this framework, “strategic alignment” is broadening in scope. Alongside decarbonisation commitments such as renewable power sourcing or low-carbon backup generation, applications that demonstrate wider sustainability benefits are likely to carry greater weight.

That could include waste heat recovery, where heat generated by servers is captured and reused to support nearby facilities such as swimming pools, leisure centres, or district heating networks. Not only does this reduce overall energy waste, but it also helps data centres integrate more positively within their communities, an important consideration in planning and local authority approval.

Data centres are sometimes criticised for their intensive energy use and for offering relatively limited long-term employment once operational. By demonstrating positive local citizenship, from heat recovery to community energy partnerships, developers can strengthen their case for connection and illustrate a broader contribution to social sustainability alongside their decarbonisation goals.

With new opportunity comes new complexity

While the new framework promises acceleration, it also shifts responsibility. Developers must now manage a far more rigorous and data-heavy process to prove project readiness.

That means assembling the right documentation, securing the right partnerships, and demonstrating credible plans for compliance, capacity, and sustainability. Preparedness will be the marker of success, as delays in securing land rights, planning permission, or investment could result in projects being downgraded or even removed from the queue.

The role of energy expertise

This is where the right partnerships can make the difference between progress and pause. Equity Energies, as part of the DCC Energy Group, supports developers and operators through every stage of the grid connection journey.

With extensive hands-on experience, and by utilising their extensive network of commercial relationships across multiple suppliers, meter operators, and data collectors, the team helps coordinate the at times fragmented process of installing meters at newly connected sites. In many cases, Equity Energies’ new connection team can install and energise meters within a week, dramatically reducing the administrative gap between readiness and operation.

But readiness isn’t just about speed. It’s about alignment, and ensuring that energy strategy, capacity planning, and sustainability commitments are integrated from the start. By bringing together expertise in energy management, data monitoring, and risk analysis, we help operators build projects that meet the technical and environmental standards the new model demands.

Designing a fast lane for digital growth

The “first ready, first connected” system marks a significant shift in how the UK builds its energy future. It rewards those that plan strategically and prove credibility. But it also exposes the gaps in readiness, coordination, and understanding that could leave many projects stranded.

As data centre development accelerates to meet AI-driven demand, the ability to connect quickly and efficiently to clean, reliable power will become the single biggest differentiator in the market. That’s why a holistic energy strategy that matches the need to connect, power, and decarbonise the data centre ecosystem has never been more critical.

Without faster, smarter grid access, the UK risks falling behind in the race for AI and cloud leadership.

The challenge now is to move from ambition to readiness; to turn plans into projects that meet the criteria for rapid connection. With the right energy strategy, partnerships, and insight, the UK can unlock the full potential of its digital economy and decarbonise at the same time.

Connection is only half the story. In part three, we’ll look at the next major pressure point: cost, and how non-wholesale costs are rewriting the financial rulebook for data centre operations.

Leo Evers, Sustainability Consultant at Equity Energies