AI Energy Council presses ahead with grid reform to meet rising AI demand
AI minister Kanishka Narayan and energy ministers Lord Vallance and Michael Shanks co-chaired the latest AI Energy Council meeting in London on 1 December. The session brought together regulators and senior figures from the energy and tech sectors to focus on one thing: connecting new capacity to the grid faster and building the infrastructure required for AI Growth Zones.
The message was clear. If the UK wants to capture AI-driven growth, the energy system has to move quicker-on connections, on capacity, and on delivery.
What was discussed
- Accelerating grid connections for AI data centres, with updates on current government action and queue reform.
- Reducing pressure on the energy system by supporting data centres in AI Growth Zones with significant electricity bill discounts when they can make use of surplus local capacity.
- Backing newly announced AI Growth Zones in North East England, and North and South Wales, with infrastructure that can be delivered on shorter timelines.
- Ensuring AI Growth Zone projects benefit from plans to speed up grid access and related consents.
- Getting a firm grip on the energy capacity needed to meet AI demand and unlocking timely access to that capacity.
- Exploring new delivery models for supplying AI infrastructure, including self-build options for connections and on-site generation.
Why this matters for government teams
AI deployments are scaling. That means larger, steadier electricity loads in specific locations. Without faster connections and smarter siting, projects stall, and local networks face cost and reliability risks.
Policy, planning, procurement, and regulatory teams will need tighter coordination to align siting decisions, network reinforcement, and low-carbon supply. Expect more emphasis on connection queue management, flexible demand, and regional capacity planning.
For context on connection reform from the system operator, see National Grid ESO. Industry coordination resources are also available via the Energy Networks Association.
Implications and immediate actions for departments
- Map projected AI loads with network operators to identify the quickest-to-connect zones and sites with existing headroom.
- Prioritise data centre locations near strong substations and surplus capacity; avoid reinforcing weak nodes unless strategic value is high.
- Develop a clear framework for temporary and targeted bill discounts linked to using excess local capacity, with safeguards to avoid cross-subsidy drift.
- Coordinate fast-track planning and environmental approvals for AI Growth Zone infrastructure while maintaining community engagement standards.
- Pilot self-build connection models with defined accountability, delivery milestones, and interoperability requirements.
- Embed resilience and sustainability: on-site generation, storage, and contracts for low-carbon electricity to stabilise long-term costs.
Regional focus: AI Growth Zones
New AI Growth Zones in North East England, and North and South Wales, are positioned to move first. The council highlighted the need to align local planning, connection timetables, and support packages so projects can proceed without delay.
Local authorities, combined authorities, and devolved administrations should prepare site lists, capacity assessments, and a pipeline of shovel-ready projects tied to grid access milestones.
What happens next
The council will meet again in early 2026. Ahead of that, departments are expected to refine demand forecasts for AI workloads, detail near-term connection opportunities, and propose scalable approaches to funding and delivering enabling infrastructure.
Expect further work on sustainable supply solutions for future AI infrastructure, including within AI Growth Zones, with a view to faster approvals and clearer commercial models.
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