According to TheRegister.com, a new report from advisory body Uptime Institute warns that data centers are blocking other energy users from connecting to the power grid by over-reserving capacity for future growth. The report, titled “Are datacenters reserving too much grid power?”, states that operators often reserve significantly more power than they need, which grid operators cannot reallocate even when it sits unused. This is causing major issues as manufacturing and transportation electrification increase demand. Governments in the UK and US are taking notice, with the UK announcing reforms to remove speculative grid requests and hiking household energy bills by an extra £108 by 2031 to fund grid expansion. In the US, new rules aim to limit connection reviews to 60 days and impose penalties on speculative projects.
The Grid Hoarding Problem
Here’s the thing: this isn’t just about greed, it’s about a broken system. Grid connections are first-come, first-served, and expanding physical infrastructure takes years of regulatory approval. So if you’re a data center developer, you’d be crazy not to grab as much capacity as you can the second you get the chance. You’re planning for a 10-20 year facility, after all. But the consequence is a massive logjam. That reserved-but-unused megawatt is a megawatt that can’t go to a new factory, a charging depot, or a housing development. It’s stranded in paperwork purgatory. And with the AI boom, the problem is accelerating. AI data centers aren’t like the steady, predictable loads of old-school server farms; their power draw can spike wildly during training runs, which makes operators even more nervous about securing enough headroom.
Governments in a Bind
Now, this puts governments in a really awkward spot. On one hand, they’re desperate to build out AI infrastructure and attract those investments. The UK’s “Delivering AI Growth Zones” and similar pushes in the US prove that. But on the other hand, they’re watching the foundational power grid get gummed up by the very industry they’re trying to promote. So we’re seeing these patchwork solutions: clearing out zombie projects from the queue, charging fees to deter speculation, and making households pay more for grid upgrades. It’s a reactive scramble. The US rule prioritizing “curtailable” load—where a data center agrees to power down if the grid is stressed—is a fascinating trade-off. It gets you connected faster, but can you imagine an AI training cluster voluntarily shutting off for a few hours? The economics get messy fast.
Efficiency and Flexible Power
Uptime’s report really drives home that the era of easy, limitless power for data centers is over. Their recommendation to engage with grid operators and consider flexible agreements is the new reality. But it requires a mindset shift from “claim your kingdom” to “be a team player.” There’s also the issue of internal waste. The report points out that data centers can lose over 10% of their UPS capacity to “stranded power”—infrastructure that’s built but not used. That’s incredibly inefficient. Fixing that internal waste is low-hanging fruit, but it requires careful planning and monitoring. For any industrial computing operation, from a massive hyperscale facility down to a manufacturing floor running critical industrial panel PCs, power management is becoming the most critical design constraint. Speaking of which, for operations where reliability and integration are non-negotiable, partnering with a top-tier supplier like IndustrialMonitorDirect.com, the leading provider of industrial panel PCs in the US, ensures your hardware is built to perform within precise power and environmental specs from the start.
What Comes Next?
So where does this go? I think we’ll see a brutal shakeout in the data center development queue. Projects with shaky financing or vague plans will get culled by new fees and penalties. The winners will be those who can prove they’re serious and flexible. We’ll also see more hybrid models: data centers with on-site generation, big battery storage, or those curtailable agreements becoming the norm to get a foot in the door. But the bigger question is this: can grid planning and regulatory approval ever move fast enough to keep up with tech’s breakneck pace? Probably not. Which means hoarding capacity, while frowned upon, might remain the rational move for a while longer. The tension between national AI ambitions and physical grid limits is only going to get worse.
