Introduction: The Data Centre Boom
Local authorities across the UK are facing an unprecedented challenge: how to accommodate the data centre boom without compromising their net zero commitments. Global electricity demand from data centres is projected by the International Energy Agency to more than double by 2030 1. In the UK, data centre power requirement is already about 1.6 GW, which is a figure on par with the electricity demand of several million UK homes2. The National Grid’s chief executive has warned that this power demand could rise six-fold in the next decade3.
The proliferation of data centres presents a massive economic opportunity, with the annual gross valued added (GVA) of data centres in the UK estimated to be £4.7 billion, with the potential for them to contribute an additional £44 billion by 20354. For this reason, the government is keen to build new data centres and position the UK as leaders in AI5. This is reflected in their recent decision to designate data centres as Critical National Infrastructure (CNI) – a decision that has come alongside other significant planning reforms, which allow data centres to bypass local planning procedures using Nationally Significant Infrastructure Project (NSIP) status6. In one notable case, the Secretary of State even overrode a local council decision to approve a data centre development on the green belt7.
Under the revised 2024 National Planning Policy Framework (NPPF), local authorities are now required to consider the needs of data centres in their local plans, including site identification8. This sets a demanding agenda for local authorities, as they try to balance competing demands for energy, whilst considering the sustainability implications of new developments. Local decision-makers need a clear view of energy needs, local impacts, and credible mitigations when considering applications.
Types of Data Centre
Data centres are physical facilities that house information technology (IT) equipment to process, manage and store data. Without them, modern digital activity would cease9.
Several types of data centre exist, which can be categorised as follows10:
- Hyperscale: large scale facilities built by major cloud providers, such as Amazon or Microsoft.
- Co-location: data centre infrastructure owned by a third party and partially rented out to other organisations.
- Enterprise: owned and operated by a single organisation for internal purposes.
- AI data centre: facilities that specialise in the computing needs of AI equipment (subset of hyperscale/colocation).
| Centre Size | IT Capacity | Site Size (square feet) | Power Draw | Power Draw (UK household equivalent) |
| Micro | ~140 servers | <5,000 | <150 kW | <500 homes |
| Small | 500- 2,000 servers | 5,000–20,000 square feet | 1-5 MW | 3,200 – 16,200 homes |
| Average | 2,000-5,000 servers | 20,000 – 100,000 square feet | ~100 MW | ~324,000 homes |
| Hyperscale | >5,000 servers | 10,000 – 2,000,000 square feet | >100 MW | >324,000 homes |
Table 1: Data on different data centre sizes, taken from IBM 10. Equivalence to average annual UK household electricity consumption column assumes a constant draw at max power requirement over the entire year and an average household electricity consumption of 2,700 kWh/year 2.
From compact enterprise servers to sprawling hyperscale campuses, facilities vary in size significantly, which has big implications on their power demands and land requirements, as shown in Table 1 below.
Energy & Environmental Pressures
Running day and night, these facilities consume huge amounts of electricity, not only to power the equipment, but also to keep it cool. To give a sense of scale, hyperscale data centres, like the Elsham data centre being developed in Birmingham, will pull a power demand on the grid equivalent to 1.4 million homes2,11.
Although the decarbonisation of the UK energy grid is underway, integrating the significant power demand of data centres into a decarbonised grid is a challenge. The National Energy System Operator (NESO) have said that data centre expansion will make achieving Labour’s pledge for clean power 2030 a “huge challenge”9. For context, the proposed Elsham data centre development in Birmingham has been forecasted to emit more than five times the carbon emissions of Birmingham Airport (based on the current energy source mix powering the National Grid11). The scale of these emissions threatens both local and national decarbonisation targets.
Securing a connection to the grid has become one of the biggest hurdles to data centre development. Many areas of the UK are facing large delays, up to 15 years, to secure a connection12. Recently, in West London, data centre demand has absorbed the entire remaining grid capacity for the next decade. Consequently, other commercial and housing developments face severe delays13. Although upgrades to the grid are now being made, these will take many years and are unlikely to offer any short-term relief.
Another environmental concern is the potential for data centres to consume large amounts of water to operate their cooling systems. With the UK projected to face a water deficit of almost 5 billion litres by 2050, the Government Digital Sustainability Alliance have highlighted the substantial threat of data centres on UK water security14.
Encouraging Sustainable Development
Although it may be impossible to completely mitigate the environmental impact of such energy demanding infrastructure, there are options to power data centres cleanly (e.g. with renewable or nuclear power), and to make use of the large amounts of heat generated. As local authorities are required to incorporate data centres into their local planning, it is extremely important that applications are assessed on their sustainability and compatibility with local and national decarbonisation targets. Below we detail some of the options that should be considered when assessing these projects:
1. Renewable Power Purchase Power Agreements (PPAs)
Power Purchase Agreements (PPAs) are long term contracts between consumers and renewable energy suppliers for purchasing an agreed amount of electricity, for an agreed amount of time. Essentially, data centres buy green certificates from renewable energy providers to cover their emissions15,16. They will then either receive their electricity through the grid, or directly by private wire.
A few companies have already done this at scale, for example: Amazon signed a corporate PPA with ENGIE to increase its share of output from Ocean Winds’ Moray West offshore wind farm in Scotland to a total of 470 MW17.
PPAs, however, have sustained consistent criticism within the sustainability sector. Critics argue that they do not match the actual consumption patterns and only partially help to decarbonise their additional energy demands18,19.
2. On-site Renewable Generation and Storage
A more sustainable option is to power data centres directly using clean energy generated on site. This both reduces the emissions of the data centre and reduces the impact on the local grid. The feasibility of this can depend on land availability and data centre size, and the intermittency of renewables will need to be managed (either with storage or grid connection), but there are multiple examples of planned and existing data centres in the UK powered – at least partially – by onsite renewable generation.
For example, the Iron Mountain London (LON-2) data centre in Slough has recently started sourcing 5 MW of power from rooftop solar panels located on local commercial and industrial buildings. Although this does not cover all its demand, it is a significant step towards securing carbon free energy for the installation20. The example also highlights the potential of rooftop solar generation (which doesn’t take up land) in industrial areas, where data centres are often located.
Even more recently, a deal has been signed to develop the UK’s first sovereign AI data centre, that will operate off-grid and be entirely renewably powered in the Killellan AI Growth Zone, Scotland21.
Meeting the energy demand of larger data centres with onsite renewables is a challenge, often owing to the need for large amounts of suitable land. For example, to power the large new Elsham data centre proposed in Birmingham, would require a solar farm five times the size of Glastonbury’s festival site, or 10,000 20-metre wind turbines11. It was thus ruled out by developers. The large amount of land required by co-located data centres with renewable generation may thus also pose a challenge for local authorities to designate enough land to meet their housing targets.
3. Nuclear Power
As one of the main barriers to providing on site renewable generation and storage for data centres is land availability, both Small Modular Reactors (SMRs) and large-scale nuclear facilities are attractive options, as they can produce a constant and carbon-free supply of power in a fraction of the required land area9.
SMRs are not yet a commercially proven technology and so their application for the widespread powering of data centres in the UK is currently speculative. However, the government intends to build the UK’s first SMR by the early 2030’s22.
4. Waste Heat Recovery
Another way to increase the sustainability of data centres is through waste heat recovery. Smart planning can redirect the enormous amounts of generated heat to district heating networks, public buildings, or industrial processes. Equinix, a data centre operator, estimates that a large data centre with 20 MW power draw, could be used to heat around 4,500 homes 23. The UK’s first heat network powered by data centre waste heat is currently being developed in West London24.
For waste heat recovery to be viable from data centres, it is critical that the data centre is sensibly located close to a reliable source of heat demand. Careful planning and early intervention are therefore essential25.
How City Science Can Help
Our technical specialists can help you navigate the complex energy and planning challenges posed by data centre applications, we have a variety of tools and models to provide you with a concrete evidence base for planning decisions:
- Local Grid Capacity Analysis: Working with the local Distribution Network Operator (DNO) data, we can identify capacity constraints, enabling informed decisions about whether your grid can accommodate the developments without crowding out housing or commercial projects.
- Non-Grid Power Assessment: We can evaluate alternative power options – from gas generation to renewable self-supply – assessing implications for your decarbonisation targets. Drawing on our set of energy planning models, we can assess local renewable potential next to the data centre to identify viable private wire opportunities.
- Heat Offtake Analysis: Analysis to determine whether sufficient heat demand exists nearby for viable heat recovery, providing foundations for planning conditions requiring developers to capture waste heat. Or, by instead first identifying suitable data centre sites based on existing heat demands.
- Planning Policy Development: We can help develop robust policies informed by evidence bases, and national and international case studies.
Data centres present a massive opportunity for the UK; if planned for correctly, we can minimise environmental damages and leverage co-location opportunities with other developments. For more information, contact Joe McQuillen, Associate Director: joe.mcquillen@cityscience.com.
References
- Energy and AI
- Average gas and electricity usage | Ofgem
- Data centre power use ‘to surge six-fold in 10 years’ – BBC News
- techUK Report – Foundations For The Future: How Data Centres Can Supercharge UK Economic Growth
- PM speech on AI Opportunities Action Plan: 13 January 2025 – GOV.UK
- Data centres: planning policy, sustainability, and resilience – House of Commons Library.
- Angela Rayner faces legal challenge over decision to allow green belt data center in Buckinghamshire, UK – DCD
- National Planning Policy Framework – GOV.UK
- https://researchbriefings.files.parliament.uk/documents/CBP-10315/CBP-10315.pdf
- What is a hyperscale data center? | IBM
- New UK AI datacentre could cause five times emissions of Birmingham airport | Greenhouse gas emissions | The Guardian
- Clean energy projects prioritised for grid connections – GOV.UK
- West London electricity capacity constraints | London City Hall
- Water_use_in_data_centre_and_AI_report.pdf
- Working Groups – Climate Neutral Data Centre Pact
- Can the grid keep up? New study probes UK data centre growth
- Amazon to procure renewable energy from the Moray West offshore wind farm in Scotland – About Amazon UK
- System-level impacts of voluntary carbon-free electricity procurement strategies – ScienceDirect
- Report-data centres-FoE2024-HDaly – final
- Iron Mountain signs solar energy deal in UK – DCD
- Plans announced for UK’s first renewable-powered sovereign cloud | IT Pro
- Advanced Nuclear Technologies – GOV.UK
- What Is Data Center Heat Export and How Does it Work? – Interconnections – The Equinix Blog
- OPDC Announces Hemiko as development and funding partner for innovative New Heat Network | London City Hall
- Warming Up to Efficiency: Understanding the Potential Benefits and Pitfalls of Data Centre Heat Export in the UK