UK prime minister Andy Burnham has unveiled Great British Grid (GB Grid), a state-owned company that will compete with the private owners of Britain’s electricity transmission network, in a move that could give data centre developers a route around the country’s congested connections queue.
Announced in Burnham’s first Labour conference speech as party leader in Liverpool on 29 September, GB Grid will be a new branch of Great British Energy and will compete with the regulated monopolies of National Grid in England and Wales, and SSE and Scottish Power in Scotland. Burnham described it as “a publicly owned company that will challenge the private sector operators”. It will be the first publicly owned network investor since privatisation.
Labour said businesses will be given the right to build their own connection infrastructure, with GB Grid able to co-invest, removing the need to wait for network companies. For the data centre sector, that could offer a route around the connections queue.
Burnham said businesses regularly tell him they cannot get going because they cannot get connected to the grid, adding that the problem pushes costs up and “holds Britain back”.
Andreas Rathmann, director, utilities at CyrusOne welcomed the move. He said:”Grid connection delays and rising energy costs are creating risks for further data centre development in the UK, adding that the sector needs certainty that power will be available when required.
“More competition in the delivery of power infrastructure will benefit the data centre sector,” he said, describing GB Grid as an opportunity for operators to use utility partnerships to speed up power infrastructure delivery in the UK.”
A queue nearly three times peak demand
The announcement comes as Britain’s demand connections queue sits at record levels. According to energy regulator Ofgem, contracted demand offers rose from 41GW in November 2024 to 125GW by June 2025. Data centres account for between 73GW and 80GW of that total, depending on which Ofgem figure is used. For comparison, peak electricity demand in Great Britain on 11 February 2026 was 45GW.
Ofgem has responded with a proposed Data Centre Commitment Fee of between £237,500 and £712,500 per MW, payable when a developer accepts a connection offer. The fee would be refunded on energisation and forfeited if the project leaves the queue early. It would apply to data centre projects of 40MW or more, and the regulator has also proposed data centre-specific milestones that developers must meet to keep their queue position.
Capacity reported on the consultation when it opened in July. It closed on 16 September, and Ofgem expects to make a decision later in 2026.
“Consumers should not bear the risks created by speculative projects,” said Eleanor Warburton, Ofgem’s director for energy system design and development, at the launch.
Connection timelines slip further
The pressure on timelines is also visible at the National Energy System Operator (NESO), which has asked Ofgem to extend its deadline for issuing Gate 2 Phase 1 connection offers, covering projects due online by 2030, from 30 September to 31 October. Around 75% of those offers have been issued so far, with about 10% expected to be affected by the delay.
Grid access has become the main constraint on UK data centre development. Research by engineering consultancy Buro Happold for the Greater London Authority found that data centre projects in London face average connection waits of seven to 13 years, compared with three to seven years in competing European cities.
That constraint has already weighed on flagship AI projects. OpenAI paused Stargate UK in April, citing energy costs and regulation. The project was due to form part of the North East AI Growth Zone.
Limited firepower
GB Grid will have access to up to £4 billion from within Great British Energy’s existing budget, and full details of the body have yet to be published.
Critics have questioned how far it can shift the market. Energy analyst group Montel described GB Grid as a relatively small player, and warned that funding it through GB Energy would mean less investment in wind and solar projects.
Market reaction was muted. National Grid shares fell 1.2% in early trading, but by the afternoon National Grid and SSE were down about 0.5%, broadly in line with the wider market.
It is not yet clear how self-built connections will interact with Ofgem’s proposed commitment fee.
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