Data centres to receive energy bill support from 2027 as part of the Government's AI focus

Energy price support

The Government has identified three critical regional zones that could benefit from energy price discounts to alleviate constraint costs. Under the current proposals, data centres in Scotland are in line to receive a commensurate energy price discount of up to £24/MWh. Development sites located in the Cumbria and North East regions are currently listed to receive up to £16/MWh and £14/MWh respective discount.

It's worth nothing at this stage that the process for attributing these discounts remains under consultation. The Government's stated intent is that data centres will be exempt from paying a portion of the wider electricity system costs, and AIGZs will aid locating projects in strategic areas that strengthen the grid and lower system costs. It’s also stated that the design of this scheme will not result in any additional costs for other billpayers.

Grid connection acceleration

To enable fast AI deployment, the Government has identified actions to accelerate grid connection times for data centres. These actions include:

• Managing speculative demand in the grid connections queue by prioritising the most credible data centre developments. The Government is creating two new connection mechanisms to support this: one for reallocation, the other for reservation. These will both hold capacity for AIGZs and prioritise access to that capacity when a project leaves the queue.
• Working with Ofgem to enable developers to build their own high voltage grid infrastructure, instead of waiting for network operators to connect sites to sub-stations.
• Supporting AIGZs through a new Connections Accelerator Service, which will offer enhanced engineering support to strategically important data projects. A pilot of the service should go live before the end of 2025.

Wider support and next steps for data centres

Having recognised the planning barriers to data centre development, the Government will – in the next three months – consult on changes to the National Planning Policy Framework. Such changes would give more weight to data centre developments compared to non-significant developments. In addition, the Government will consider whether data centres should have Critical National Priority status.

To coordinate support for investment and accelerate the fulfilment of AIGZ plans, the Department for Science, Innovation and Technology will launch a delivery unit in January 2026. Acting as a point of contact for investors and developers, this unit will provide guidance on accessing Government assistance, including the price support scheme.

The Government will also consult on the energy price support scheme for data centres, ahead of its planned implementation in April 2027.

Disclaimer

We’ve used all reasonable efforts to ensure that the content in this article is accurate, current, and complete at the date of publication. However, we make no express or implied representations or warranties regarding its accuracy, currency or completeness. We cannot accept any responsibility (to the extent permitted by law) for any loss arising directly or indirectly from the use of any content in this article, or any action taken in relying upon it.