AI Datacentre Boom Threatens UK Grid Capacity and Climate Goals

Ofgem says about 140 proposed projects, driven by AI use, could require more power than current peak demand

The amount of power being sought by new datacentre projects in Great Britain would exceed the national current peak electricity consumption, according to an industry watchdog. Ofgem said about 140 proposed datacentre schemes, driven by use of artificial intelligence, could require 50 gigawatts of electricity – 5GW more than the country’s current peak demand.

The figure was revealed in an Ofgem consultation on demand for new connections to the power grid. It pointed to a “surge in demand” for connection applications between November 2024 and June last year, with a significant number coming from datacentres. This has exceeded even the most ambitious forecasts.

Meanwhile, new renewable energy projects are not being connected to the grid at the pace they are being built to help meet the government’s clean energy targets by the end of the decade.

Ofgem said the work required to connect surging numbers of datacentres could mean delays for other projects that are “critical for decarbonisation and economic growth”. Datacentres are the central nervous system of AI tools such as chatbots and image generators, playing a vital role in training and operating products such as ChatGPT and Gemini.

The rapid rise in energy consumption could also make it more difficult for the UK to meet its target to create a virtually carbon-free power system by 2030, which is already in doubt amid concerns over the rising cost of the country’s electricity.

Although some tech bosses and climate experts believe AI could help the fight against global heating by making power grids work more efficiently or accelerating the development of new zero-carbon technologies, there are widespread concerns that in the near-term datacentres will drive demand for fossil fuels to meet their energy demands.

Ofgem also said unviable applications for grid access could block progress for important datacentre bids, such as those related to the government’s AI growth zones. The zones, touted as offering a streamlined planning process and help in accessing energy, were announced last year as part of plans to increase the UK’s adoption of AI.

The regulator has proposed tougher financial tests for datacentre developers to join the queue to connect to the grid, in order to avoid creating a backlog of projects that do not have sufficient funding in place delaying viable projects that are further down in the queue.

Ofgem said datacentres must be central to any changes to the application process for electricity connections, describing the issue as a “global challenge” and saying there was no mechanism for prioritising projects deemed strategically import by ministers.

The regulator is considering charging datacentre providers for access to an energy connection – via a deposit or a nonrefundable fee – that could also deter “nonviable” projects that would otherwise clog up the application process. Ofgem is also exploring whether datacentre developers should pay for, and build, their own grid access, which would “accelerate connections and deliver better outcomes for consumers”.