April 2, 2026
Early in March, the UK Government’s Department for Energy, Security & Net Zero released its open consultation on ‘accelerating electricity network connections for strategic demand’.
The proposals represent a bold attempt to accelerate network build-out across the UK, with reforms to planning and consent, land access rights, and the system access process. DC Byte’s EMEA analysts look at what this could mean for the UK Data Centre Sector.
What is the Consultation Trying to Achieve?
In short, the government feels that growth in the UK’s network infrastructure is being held back by bottlenecks. These impediments range from long lead times for new infrastructure build out to ‘vital demand’ projects being held behind less-developed proposals in the queue.
In partnership with Ofgem and The National Energy System Operator (NESO), the UK Government is intervening to improve readiness, protect the integrity of the system, and ensure that the ‘right’ demand projects can connect quickly. The consultation has four key objectives:
- Safeguard fairness and efficiency of the demand connections process by minimising speculative activity and oversubscription
- Equip the connections regime to accelerate access to available network capacity for government-identified strategic demand projects, including facilitating pre-2030 connections for critical sites such as AIGZs, where possible
- Balance Government’s ambitions to accelerate demand connections with the effective management of system costs and maintenance of energy security
- Establish aligned processes for strategic demand connections across transmission and distribution networks, as far as practicable
What Are the Potential Impacts on the Data Centre Sector?
A ‘Two-tier’ Market
One obvious potential outcome of the proposals is an accelerated timeline for those projects that the government deems “strategic”. This would lead to a two-tier market, with strategic, fast-tracked projects at the head of the queue and non-strategic schemes heavily delayed. Or, in the case of the more speculative projects, removal from the power queue altogether.
This would naturally prioritise major operators, developers and hyperscalers, leading to a market consolidation around those with the largest and best-resourced projects. However, as we’ll discuss later, this isn’t necessarily the case for major operators who are new entrants to the market.
The Rise of Alternative Connection Models
For those outside of the major operators, particularly new-market entrants and smaller entities with more speculative projects, the proposals pose a very real threat to their ability to access power. To continue to operate within the UK, these smaller developers will need to consider alternative routes to grid connectivity.
One way around stricter grid criteria could be self-generation of power by smaller developers. Charlie Enright, DC Byte’s Senior Analyst for the Nordics, UK and Ireland explains,
“A two tier market could emerge with more speculative schemes by smaller developers forming new hubs in areas that historically have low power demand, such as Northern England and Scotland. The developers in these hubs could band together to fund their own power, circumventing stricter grid criteria.”
Another potential option for smaller players is to contract “non-firm power connections” to access spare grid capacity in key clusters, like those in London. This could then be backed with owned or self-generated energy assets.
To work, these approaches would need a level of collaboration between operators that’s currently unusual. However, the new proposals could provide the catalyst for a transformation in how smaller players access power.
Market Consolidation Around Local Players
Although these proposals generally favour major operators, there is a caveat. As we’ve seen in markets with similar systems, the process tends to favour those operators with a long track record within the country.
In practice, this can encumber market entry for overseas operators, even those who are large players within their home countries. For example, in Norway and Sweden, we’ve seen the market coalesce around a set of smaller, well-established local players. Meanwhile, those international operators new to the market have faced difficulties in securing power.
Location, Location, Location
One of the key aspects of the proposals is prioritised connections for projects around “critical sites”. What this will likely lead to is projects clustering around those locations that NESO and the government have deemed critical, as operators seek to access prioritised connections.
In turn, this would increase competition in prioritised areas, likely forcing out smaller, less-resourced operators in favour of large local players. Or, to put it another way, location has always been a key consideration in data centre build out, but these proposals could make it the most important factor of all.
What Can Norway Tell Us?
The proposals laid out in the consultation are strikingly similar to those already implemented by the Norwegian government in 2025. Charlie Enright, DC Byte’s Senior Analyst for the Nordics, UK and Ireland, explains what we can learn from Norway.
“The system is moving closer to what Norway has in place: maturity assessments and a power queue. Statnett (Norway’s transmission system operator) assesses schemes applying to connect to the grid based on operational experience, funding, customer contracts (off- takers) and many other stringent criteria, including power availability in the locality, then places them in the queue to receive power accordingly.
This has led to a consolidation by a smaller set of local players and encumbered market entry by overseas operators. Reception in Norway has been mixed. On the one hand, it can prolong power delivery timelines, impacting Norway’s competitiveness against its neighbours. However, on the other, it sets a framework whereby the state can remove schemes which aren’t credible.
We’re seeing similar systems rolled out across the Nordics, so it’s a set of ideas that are gaining traction, even with some pitfalls.”
A Needed Intervention, But One with Potential Drawbacks
Finally, what should we make of the UK Government’s intervention? First, the scheme should be applauded for its boldness in addressing a real problem. While it’s certainly not alone in its struggles, the UK does have a large backlog of projects waiting for power connections. And it’s crucial for the UK’s wider goal of becoming a leader in the sector that major projects are expedited.
Likewise, this approach allows the state to ‘weed out’ more speculative projects with less chance of success, that are nevertheless taking up a space in the power queue. This is a net good for the UK data centre ecosystem as a whole.
However, as other markets that have adopted similar systems reveal, the proposals aren’t without their drawbacks. This approach can make it more difficult for international operators (and their investment) to enter the market. Alongside this, the system can prolong power delivery timelines for all but a few operators, building out in specific critical markets. In some cases, this can act as a blocker for the growth of emerging local markets and innovation from new entrants.
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