Grid Queues Now Exceed Peak Demand in Texas, Virginia, Finland and the UK

In Texas, Virginia, Finland and the UK, more capacity is now waiting to connect to the grid than each system uses at its peak. Data centres account for much of it. The International Energy Agency set out the figures in a report for France’s G7 presidency on 14 October. It counts 134 policies written to manage the rush, and nearly 40% of them are less than a year old.

Behind the queues sits more than $700bn of hyperscale capital investment planned for 2026, mostly in new data centres. Data centre electricity use rose 17% in 2025, while demand as a whole grew by about 3%.

Every one of those projects joins the same queue as a housing estate, a factory or a bus depot. It also competes for the same transformers, which the IEA says are in short supply. Many grids still serve the queue in the order requests arrive, under rules the IEA says were not designed for projects this large and fast. So regulators now have to decide who goes first, and who pays for the upgrades.

Sorting real projects from speculative ones

Australia’s market operator screened 44 GW of data centre requests and judged only 7.9 GW, about 18%, likely to proceed. Duplicates and speculative bids fill queues elsewhere too, the IEA warns, which makes them hard to plan around. Build for all of them and new lines sit idle. Build for too few and the bottleneck stays.

ERCOT, which runs most of the Texas grid, faces the largest version of that problem. It is weighing more than 474 GW of requests, more than five times the state’s record peak demand, and about 90% come from data centres. On 3 August, Governor Greg Abbott ordered an audit of every data centre project in the queue and barred them from advancing until it ends. ERCOT expects to finish checking about 300 projects by 10 December.

Texas regulators have also put a price on a place in the line. Since 18 September, new loads of 75 MW or more must post security of $50,000 per MW. Developers who walk away after capacity is allocated lose part of it.

Homes and factories wait behind them

In July 2022, the Greater London Authority sent a warning to developers in Ealing, Hillingdon and Hounslow. New homes and industrial premises could wait up to a decade for a connection, it said, partly because of data centres along the M4. City Hall has since helped free up at least 11,690 permitted homes on stalled sites, largely through short-term fixes. The transmission upgrades are still pending.

Across Britain, demand applications rose from 41 GW to 125 GW between November 2024 and June 2025. Data centres account for at least 80 GW, Ofgem says. Yet in a March survey by NESO, the system operator, just 32% of them had a customer lined up. So housebuilders and manufacturers can end up queuing behind projects that may never exist.

Speculative projects “can delay other schemes and create uncertainty about future network needs,” said Eleanor Warburton, Ofgem’s director for energy system design and development. Ofgem’s answer, proposed in July, is a commitment fee of £237,500 to £712,500 per MW. Developers would get it back when they connect and forfeit it if they drop out.

Once built, data centres reshape a country’s demand, as Ireland shows. They used 23% of its metered electricity in 2025, up from 5% in 2015 and more than all urban households combined. Ireland now ties new connections to their location, the state of the system and extra supply.

Who pays for the wires

A data centre that uses spare capacity and pays its share can ease bills, the IEA says, because it spreads fixed costs over more consumption. One that needs new infrastructure can do the reverse, and part of that cost “may be recovered from households”.

Data centres accounted for $6.3bn of the $16.4bn cost of PJM’s latest capacity auction. PJM runs the grid for 13 US states and Washington DC. Its independent market monitor, which made the calculation, puts their share across the last four auctions at 46%. Utility customers pay those charges through their bills.

Virginia now makes large users carry more of that risk themselves. From 2027, customers above 25 MW pay for at least 85% of the network capacity they contract, even if they use less. The minimum for generation is 60%. Contracts run for 14 years, with exit fees for early departure.

Where developers can’t get onto the grid quickly, more of them plan gas generators on site. That is one reason the IEA’s central scenario sees data centre emissions climb from about 150 Mt of CO2 to around 350 Mt by 2035.

Faster connections, with conditions

Non-firm connections let the grid limit a site’s supply under stress, in return for connecting sooner. The IEA estimates they could free 750 to 900 GW of hosting capacity worldwide. Renting AI-optimised compute costs $20bn to $30bn per GW a year, though, about 100 times the equivalent cost of a battery. That makes each curtailed hour expensive for operators.

In the US, a data centre load of over 3 GW dropped off the grid abruptly and switched to backup supply. System operators are now considering performance requirements for loads that size.

ERCOT’s audit will give the first count of how much of the Texas queue is real. Ofgem’s consultation on its fee closed on 16 September. Its decision will show whether a refundable charge can thin Britain’s queue and move homes and factories up the line.