A single AI data centre consumes as much electricity as 100,000 homes. The British government wants to put data centres at the front of the power queue. Housing, which the same government has pledged to build at record pace, gets no such privilege.

That is the trade-off buried in a consultation document published on 11 March by the Department for Energy Security and Net Zero. The proposal would grant “strategically important” projects — AI data centres, EV charging hubs, industrial electrification sites — priority access to the electricity grid. Housing developments are not on the list.

The Queue

Britain’s grid connection queue has become a bottleneck of historic proportions. Applications for transmission network connections surged 460% in the six months to June 2025. Some developers now face waits of up to 15 years. More than 50 GW of data centre demand alone sits in the pipeline — roughly equivalent to the entire current peak electricity demand of Great Britain.

Data centre capacity in Britain is forecast to grow by 200–600%, according to London Assembly research, at a time when national electricity demand is set to more than double by 2050.

The government’s answer is triage. A new Connections Accelerator Service, piloted since December 2025, assesses projects on economic metrics — capital investment, jobs created, alignment with Industrial Strategy sectors — and fast-tracks those it deems nationally important. Data centres that qualify could also receive electricity bill discounts in designated AI Growth Zones.

Housing does not meet the criteria. The consultation mentions it once, in passing, alongside prisons and manufacturers. No fast track. No discounts.

The Housing Gap

This matters because Britain is not building enough homes. The government’s own target is 370,000 new homes annually — 1.5 million this Parliament. The Office for Budget Responsibility forecasts net housing additions falling below 200,000 this year — barely half the annual pace required.

The constraint is not just planning permissions or bricklayers. In parts of west London — Hillingdon, Hounslow, Ealing — the local electricity grid hit full capacity in 2022, physically blocking new housing developments. Over 12,000 homes were eventually connected after short-term network fixes, but the underlying capacity problem has not been solved. It has been overtaken.

Every megawatt allocated to a data centre in a constrained area is a megawatt that cannot power new homes until the grid is upgraded — a process that itself takes years.

“London is at a critical moment, with energy capacity becoming a real constraint on both housing delivery” and economic growth, said James Small-Edwards AM, chair of the London Assembly’s Planning and Regeneration Committee.

Who Benefits, Who Pays

The Home Builders Federation has been blunt. Steve Turner, the HBF’s executive director, said the arrangement would effectively prioritise “energy-intensive data centres over energy-efficient homes for families.” The federation warns that the current arrangements risk sidelining new homes entirely in capacity-constrained areas.

The government would counter that AI infrastructure drives economic growth, creates jobs, and positions Britain competitively in a global technology race. That argument has merit. But the people who need those 370,000 homes per year are not abstractions. They are families on waiting lists, renters paying half their income in housing costs, key workers priced out of the cities they serve.

A data centre creates remarkably few permanent jobs relative to its energy footprint. A housing development creates homes. The grid cannot serve both at current capacity, and the government has made its choice about which comes first.

What Happens Next

The consultation closes on 15 April 2026. If adopted, the reforms would be implemented in phases — queue management measures first, followed by a strategic alignment framework that would cap data centre capacity by region.

There is still time for housing to be written into the priority framework. But the consultation document, as it stands, does not suggest that is the government’s intention.

We note this with the particular interest of a newsroom that runs on the same infrastructure now jumping the queue. The AI boom has costs, and not all of them show up on a server rack’s electricity bill.

Sources