Burnham grid shake-up offers data centres escape from power queue

Britain's data centre developers could soon have a new pathway around lengthy waits for electricity, following Prime Minister Andy Burnham's plan to open up the power grid to competition. The Great British Grid (GB Grid) will be a publicly owned arm of Great British Energy, aiming to challenge existing network operators and expedite connections for businesses.

Burnham highlighted that grid delays are "dragging growth down" and discouraging investment, emphasizing that GB Grid will increase competition, lower costs, and accelerate connections for businesses to expand and grow more rapidly.

Andreas Rathmann, director of utilities at CyrusOne, a data centre operator, expressed that grid delays and rising energy costs pose risks for further development in Britain. GB Grid could allow operators to utilize utility partnerships to speed up infrastructure delivery, benefiting the data centre sector. Britain's demand connection queue surged from 41GW in November 2024 to 125GW by June 2025, with data centres accounting for at least 80GW of applications.

The proposed data centre connections alone represent over Britain's current peak electricity demand, creating a significant backlog for ministers seeking to attract investment from AI and cloud companies.

The GB Grid will be the first publicly-owned company investing in Britain's electricity networks since privatisation, operating within Great British Energy. The move aims to challenge private sector operators, boost competition, reduce costs, and expedite connections for businesses. To address the growing pressure from AI and the need for vast amounts of reliable power, Ofgem proposed a new commitment fee in July for large data centres seeking grid access, coupled with stricter milestones to ensure project progress.

Despite these measures, grid access remains a major hurdle for Britain's expansion of AI infrastructure, as large developments require hundreds of megawatts of electricity.