Government to prioritise clean energy projects in electricity grid reform

Companies developing clean energy and future-focused infrastructure such as data centres will be prioritised for connection to the UK’s electricity grid under reforms planned by Ofgem.

The changes, developed by the National Energy System Operator (NESO) in collaboration with the energy industry, aim to reduce the backlog in the grid connection queue by removing stalled or inactive applications, so-called “zombie” projects. These projects have been identified as a major bottleneck, with some firms currently facing delays of up to 15 years to access the grid.

The grid connection queue has expanded tenfold in the past five years. Under the new approach, projects that are ready to proceed and contribute to clean power generation, energy security, or key technologies like artificial intelligence will be given priority.

Officials say the move is intended to support an estimated £40 billion in mostly private annual investment in clean energy and related infrastructure, with the goal of increasing energy capacity while reducing the need for costly grid upgrades. Ofgem estimates that the reforms could save billpayers around £5 billion by reducing the need for extensive grid reinforcement.

Since July 2024, the government has recorded £43.7 billion in announced private investment in UK clean energy industries, including £38 billion for data centre projects. However, access to grid connections remains a central challenge for many of these developments.

According to NESO, the revised connections process will focus on prioritising projects that are “critical and shovel-ready,” offering developers greater certainty to proceed with investment. Energy Secretary Ed Miliband said the reforms are designed to fast-track grid access for projects that can generate domestic power and improve energy resilience.

The announcement comes amid broader government efforts to support industrial development in response to what ministers describe as a period of global instability. As part of a broader “Plan for Change”, the reforms are intended to align infrastructure planning more closely with national economic and energy goals.

Energy Secretary Ed Miliband:

“Too many companies are facing gridlock because they cannot get the clean energy they need to drive growth and create jobs. These changes will axe ‘zombie’ projects and cut the time it takes to get high growth firms online while also fast-tracking connections for companies delivering homegrown power and energy security through our Plan for Change. In an uncertain world, our message to the global clean energy industry is clear; come and build it in Britain because we are a safe haven. If you want certainty, stability and security when it comes to your investments, choose Britain.”

Ofgem CEO, Jonathan Brearley:

“The proposed connection reforms will supercharge Great Britain’s clean power ambitions with a more targeted approach anticipated to unlock £40 billion a year of investment and energise economic growth. The reforms would cut through red tape, consign ‘zombie projects’ to the past and accelerate homegrown renewable power and energy storage connections as we head to 2030.

“Houses and hospitals, electric vehicle charging stations, data centres and the emerging AI sector, would also all benefit from the proposed streamlined fast-track approach, which would help boost energy security and drive down bills.”

Alice Delahunty, president of electricity transmission at National Grid:

“Today’s decision by Ofgem is a key step towards realising Britain’s clean energy ambitions and marks the culmination of significant combined efforts across industry, Ofgem and government. This reform will tackle an oversubscribed connections pipeline, and help give us clarity around future network needs so that we can get the right mix of clean power projects plugged in to the right places to achieve net zero. We look forward to working with industry, government and Ofgem to collectively focus on implementing the new connections process.”