Market Watch  ·  Issue 6  ·  Tuesday 4 August 2026

Watts Happening

 

The UK energy newsletter that doesn't work for the industry

The Spark

The queue to connect to Britain's electricity grid holds 73 gigawatts of data centre demand across 315 projects. The country's actual demand peaks at around 45 gigawatts on a cold winter evening.

So the data centres waiting in line have booked, on paper, more grid than Britain uses at full stretch. Ofgem's own view is that much of it will never be built. This week it proposed charging developers up to £712,500 per megawatt just to hold their place, refunded only once they actually connect.

The bottleneck was never only the pylons. Some of it was paperwork nobody meant to honour.

This Week in Watts

Britain's grid queue is booked solid. Ofgem thinks a lot of it is a bluff.

On 29 July, Ofgem opened a consultation on a new charge aimed squarely at data centres. Any project above 40 megawatts would have to lodge a Data Centre Commitment Fee when it accepts a grid connection offer, set between £237,500 and £712,500 per megawatt, roughly 2.5% to 7.5% of the project's build cost. The money comes back when the site is energised and is forfeited if the developer walks away. Alongside it, projects would have to prove real progress to keep their place: financial capability, procurement of long-lead equipment, and a credible end user.

The reason is the queue itself. Between November 2024 and June 2025, contracted demand waiting to connect rose from 41 gigawatts to 125. Data centres account for around 73 of that. Set against a national peak near 45 gigawatts, the arithmetic doesn't hold as physical demand. Ofgem's read is that a large share of these applications are places held by developers keeping their options open, and that they push viable projects back and distort where the networks think they need to build.

This is the big commercial connections queue, not the process your home solar goes through. It reaches the reader anyway. If you are a developer, a landlord, or a business quoted a connection date in the 2030s and a heavy reinforcement bill for a rooftop array, a battery, an EV hub or a heat pump retrofit, this queue is a large part of why. And the cost of planning networks around demand that never arrives lands on everyone through network charges.

Two cautions. This is a proposal, open until 16 September, not a rule. And while Ofgem's earlier reform on the generation side brought forward 7.8 gigawatts of projects by an average of six years, the same effect on the demand side is expected, not banked. Nobody's connection date has moved yet.

A grid can be full and empty at once. That is the thing Ofgem is now trying to put a price on.

The Bill Buster

The 32p export rate is real. Most people will never see it.

Solar export tariffs get sold on their top number. Octopus Intelligent Flux advertises up to around 32p per kilowatt hour in the 4 to 7pm peak. It is a real rate, and a ceiling. Reaching it takes a compatible battery, an Octopus import tariff, and conditions most homes don't meet.

Here is what the headline hides. On Flux, import and export prices move together. The evening window that pays the most to export is the one that costs the most to import. If your house is drawing power then, cooking, charging a car, running a heat pump, the import side quietly eats the export gain. The rate anyone can get without switching their import supplier is the Smart Export Guarantee floor, and Octopus pays 4.1p for it.

So check the small number before you chase the big one. Find your export rate on your last statement. If you're on a 4 to 5p default and own a battery, a time-of-use tariff can pay more. Ask for a blended figure based on how your home actually uses power, not the peak.

→ Check your export rate, then ask what you'd net after the import side

Watts on the Market

Unsold this week  ·  Reader resource

The grid spent this week arguing over who gets to connect and when. One cost in all of it isn't up for debate: your own. What staying exactly as you are costs you over 25 years, at realistic inflation, with nobody selling you anything at the end. That is what the Watts Happening Cost of Inaction calculator works out. Your bill, your property, two scenarios, one number.

→ Run your 25-year number at calculator.wattshappening.energy

Quick Watts

£250 by the pylons

Households within 500 metres of new or upgraded transmission lines will get up to £250 a year off their bill for ten years, paid as two £125 instalments. Ofgem is consulting on how it runs the scheme now. First payments land in the first half of 2027, so it's a discount to know about, not to bank on.

(DESNZ, 27 July 2026 / Ofgem, 29 July 2026)

Rates held

The Bank of England kept Bank Rate at 3.75% on a 6 to 3 vote, with the three outliers wanting a rise, not a cut. CPI sits at 2.6% and is expected to climb as energy costs feed through. The Bank named volatile energy prices as a reason to wait. Cheaper borrowing is on hold, and energy is part of why.

(Bank of England, 30 July 2026)

Carbon maths, corrected

DESNZ has reissued its 2026 greenhouse gas conversion factors after some values were wrongly published as zero instead of blank. If your business reports emissions under SECR, check your team is on the corrected file.

(DESNZ / GOV.UK, 31 July 2026)

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