Datacentres accused of hoarding power capacity as AI demand surges

Operators routinely request extra capacity they may never use

Report suggests datacentre firms embrace flexible connection agreements, allowing grid operators to temporarily curtail their loads during peak demand or emergencies.

A growing trend of datacentre operators reserving far more grid power than they use is restricting access for other major energy consumers and slowing the transition to electrified industries, according to a new report from the Uptime Institute.

The research finds that most datacentres maintain stable power usage, ramping up only when new facilities or equipment expansions come online. However, operators routinely request extra capacity, sometimes for growth plans that never come to fruition, locking that power away from other sectors.

Under current rules, grid capacity allocations are made on a first-come-first-served basis and remain tied up unless a developer voluntarily surrenders them.

The Uptime Institute warns that this system is increasingly unsustainable as more sectors transition to electricity.

Manufacturing and transportation electrification have accelerated demand for high-capacity connections. However, a surge in AI datacentres has introduced new volatility. Unlike traditional facilities that draw consistent energy loads, AI training workloads can cause dramatic power spikes, further straining infrastructure.

The report also highlights an overlooked inefficiency inside the datacentres themselves. Poor utilisation of built-out electrical systems can leave 10% or more of uninterruptible power supply (UPS) capacity stranded, meaning it is available but not serving IT equipment or supporting systems.

To alleviate pressure, the Uptime Institute suggests datacentre firms embrace flexible connection agreements, allowing grid operators to temporarily curtail their loads during peak demand or emergencies.

Such deals require real-time monitoring and other technical requirements but can unlock faster connections in congested areas.

UK moves to unclog power queues

In the UK, the government has announced a set of reforms under the banner of "Delivering AI Growth Zones," targeting speculative grid requests from developers whose projects stalled but were never cancelled.

Ofgem, the national energy watchdog, has approved more than £17.8 billion in gas system upgrades from 2026, while another £10.3 billion will go toward the largest high-voltage electricity network expansion since the 1960s.

More than 80 major projects will add new transmission cables and modernise overhead power lines.

Ofgem says the energy bills will rise to cover new infrastructure, including an annual increase of about £108 in network charges by 2031. But it adds that the investments could ultimately reduce reliance on imported gas, resulting in a net energy bill increase of roughly £30 a year instead of the full £108.

US environmental groups demand moratorium as politics shift

In the United States, a coalition of more than 230 environmental groups, including Greenpeace, Friends of the Earth, and Food & Water Watch, has called on Congress to halt all new datacentre approvals until federal regulations are strengthened.

The letter [pdf] argues that rampant datacentre construction, fuelled by AI and cryptocurrency booms, is "disrupting communities across the country and threatening Americans' economic, environmental, climate and water security."

Activists say the facilities consume vast water supplies, contribute to rising emissions, and worsen soaring power bills.

At least 16 US datacentre projects worth $64 billion have already been blocked or delayed over electricity and water concerns.

The political impact is broad: campaigns promising lower utility costs and limits on datacentre expansion have recently helped Democrats secure big wins in governor races in Virginia and New Jersey and a surprise victory in a Georgia public service commission election.

About 80 million Americans are struggling to pay electricity and gas bills, and many, regardless of party, believe datacentres are a primary culprit.

"We are entering a new era that is all about electricity prices," said Charles Hua, founder of the non-partisan cost-reduction group PowerLines, adding that conservative voters in Georgia broke ranks over utility costs.

Emily Wurth, managing director of organising at Food & Water Watch, told The Guardian that many people "don't see the benefits coming from AI and feel they will be paying for it with their energy bills and water."

"We've seen outrageous utility price rises across the country and we are going to lean into this. Prices are going up across the board and this is something Americans really do care about," she added.