Ofgem is considering whether data centres could face mandatory curtailment during periods of system stress. 

The proposal comes amid growing concern that rising demand from AI and cloud computing could place further pressure on Britain’s already constrained grid. It also forms part of the regulator’s wider demand connections reform work, which is designed to speed up access to grid capacity for viable projects, while clearing out speculative schemes and maintaining security of supply.

While Ofgem is not yet proposing immediate mandatory controls, it has said that a backstop operational measure, such as curtailment, may be needed to give the system operator confidence that the grid can cope during stress events. That is particularly relevant to data centres, given both the scale and pace of demand growth from the sector.

Of course, forcing data centres to reduce power consumption is not exactly a minor intervention. The sector is built on resilience, uptime, and predictable access to power. Any suggestion that sites may need to curtail demand during stressed periods will therefore raise questions. 

That concern has already been acknowledged by Ofgem, which noted that data centre operators and trade associations had raised the challenges mandatory measures could present to different business models and overall investability.

A backstop, not a first resort

The regulator is also exploring voluntary flexibility arrangements, which could allow data centres to reduce consumption or adjust operations in exchange for earlier access to grid capacity.

That may prove more palatable to the industry, especially for certain types of facilities. AI training workloads, for example, may be better suited to flexible operation than cloud services that need to deliver constant availability. There may also be opportunities to design flexibility into new data centres from the outset, particularly if doing so helps developers secure a faster connection.

Ofgem’s argument is fairly simple. If large demand users can provide some level of flexibility, the electricity system may be able to connect more capacity without having to take such a cautious approach to long-term security of supply modelling.

That could matter enormously for the UK’s data centre ambitions. Developers are already facing connection delays stretching years into the future, with grid access increasingly becoming one of the biggest constraints on new projects. That sits awkwardly alongside the UK Government’s wider ambition to use AI and digital infrastructure as a driver of economic growth.

Ofgem expects to consult on any additional operational control measures in autumn 2026, when it will set out whether a mechanism is required, how it could be implemented, and what the likely impact may be.

Gas enters the conversation

The grid bottleneck is also pushing some data centre developers to look beyond electricity connections altogether.

Future Energy Networks has said gas networks received 113 enquiries from data centre developers across 2024 and 2025, with around three times as many enquiries submitted in 2025 compared with the year before. Gas networks are currently processing 46 applications from data centre developers.

That could complicate the UK’s progress to decarbonise its power system, but it’s an inevitability. If electricity connections are too slow, developers will look for alternatives. 

The UK Government and Ofgem have both acknowledged that gas may have a role to play in bridging power shortages, particularly where grid connections are delayed. However, there is a clear risk that short-term fixes become long-term dependencies, especially if data centres are built around gas-fired generation rather than using it as a temporary backstop.

That is the difficult balance now facing the regulator. The UK wants more data centres, faster grid connections, stronger AI infrastructure, and a cleaner electricity system. Delivering all four at once will not be easy.

Of course, the UK isn’t alone in grappling with this problem. Ireland has already introduced tighter rules for new data centre connections, after the sector’s electricity consumption rose to more than a fifth of national demand.

New Irish data centres are now expected to bring forward generation or storage capacity to match their demand, while also meeting the bulk of their annual electricity needs through additional renewable generation. That’s why the country now plays host to Europe’s ‘first’ data centre microgrid – with that model likely to grow in popularity as grid constraints continue.